Zurich, 1 March 2017 – Following a comprehensive data revision, the UBS consumption indicator climbed from 1.38 to 1.43 points in January. The rise owes to a clear improvement in consumer sentiment as the Consumer Sentiment Index published by the State Secretariat for Economic Affairs climbed from -13 to -3 points. Compared with the previous year, new car registrations decreased 3.7%. At 48.9%, the share of new cars with four-wheel drive makes up the biggest proportion of the purchases, which may be due to the large amount of snow that fell in January. As expected, domestic tourism rose slightly from November to December, benefiting from Christmas business. But compared with the same month last year, the number of overnight hotel stays dropped 2.3%.

Swiss citizens view the general economic situation in their country as well as their own professional and financial position in the first quarter of this year, with considerably more optimism than before. Consumer sentiment has reached its highest value since July 2014. Thanks to declining unemployment, and for the first time since the franc shock in January 2015, labor market data is no longer rated pessimistically. There are few changes with respect to expected price behavior. UBS's forecast of 0.4% inflation this year appears consistent with consumer sentiment. Overall, the consumer sentiment has brightened with regard to national economic developments. We nevertheless remain cautious about consumption this year. There is still too much uncertainty on the capital markets given the upcoming elections in France and the unpredictability of the Trump administration.

How the UBS Consumption Indicator is calculated
The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of one to three months on the official figures. At more than 50%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from six consumer-related parameters: new car registrations, business activity in the retail sector, the number of domestic overnight hotel stays by Swiss residents, the consumer sentiment index, employment figures and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index and employment figures, all of this data is available monthly.

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Sibille Duss, UBS Chief Investment Office WM
Phone +41-44-235 69 54, sibille.duss@ubs.com

Alessandro Bee, UBS Chief Investment Office WM
Phone +41-44-234 88 71, alessandro.bee@ubs.com

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