Zurich, 07 March 2019 – Uncertainties over the direction of the economy, especially in the eurozone, and over political turmoil (involving Brexit, for instance) are significant. This is reflected in the downward trend of both barometers (for SMEs and for large companies), which continued into January. The uncertainty surrounding economic trends had an impact not only on industrial companies but also on domestically oriented firms.

Among SMEs, wholesale, retail, and industrial companies in particular were responsible for the decline in the barometer, while for large companies, the service sector and wholesale were the primary drivers. Overall, the deterioration was found in all sectors and for both company sizes.

New calculation method

For the first time, we based the calculation of the barometer for both SMEs and large companies on service sectors as well as industrials. With this new calculation, the two barometers shed light not only on a partial aspect of the Swiss economy but also on the economy as a whole, thus providing a better picture of the direction of the local economy and the two size classes.

UBS SME barometer

Source: KOF, UBS

Calculation of the UBS SME barometer

The UBS SME barometer is based on the monthly and quarterly survey of the KOF for industrial and service companies. It is calculated as the first main component of 155 subindicators, divided into SMEs (up to 200 employees) and large companies (more than 200 employees). It is scaled so that its mean value is zero and its variance is 1.


The business situation for both SMEs and large companies improved slightly between October and January. For both company sizes, however, incoming orders worsened compared with the previous year, as did returns compared with the previous quarter. Companies are optimistic about future price behavior. However, the cooling down of the eurozone economy and political uncertainties made the survey participants for the two company sizes more skeptical about future trends in incoming orders as well as the level of production.

Service sector

Whereas the business situation worsened slightly for large service companies between October and January, it improved slightly for SMEs. The economic situation for service companies is only slightly better than for industrials. For large companies, deterioration was seen in most indicators over the survey period. For SMEs, in contrast, the earnings situation brightened, and companies are more optimistic about future trends, including in terms of demand and prices.


Although the business situation for SMEs and large companies in construction worsened slightly, the upward trend among SMEs has now persisted since mid-2016 – we do not expect this direction to change. For SMEs and large companies, demand and construction activity worsened in January, and order backlogs were lower than in October. These declines were more pronounced for SMEs than for large companies. However, companies were quite optimistic about future trends in construction activity and demand, and they expect that the economic situation will improve.

Architecture and engineering

Although in recent years the rating for the business situation for architecture and engineering has continuously worsened, the economic situation was still judged to be better than in all other sectors, and again improved slightly. While demand declined somewhat for large companies, and order backlogs were lower in January than in October, the earnings situation improved and the value of construction projects, services and materials increased in all segments. For SMEs, the earnings situation saw particular improvement, and demand rose slightly in January. In terms of the value of construction projects, services and materials, the picture was mixed – it did not increase in all segments.

Retail trade

In retail, the business situation for SMEs once again worsened. Although for some indicators, the downward trend slowed slightly, most declined further. This was particularly pronounced for earnings, sales, and store traffic. The picture was slightly better for large companies. The business situation improved, and sales, store traffic and returns were higher, although momentum subsided . Because of slightly lower inflation in the current year, we anticipate slight increases in real wages, which should stimulate private consumption in Switzerland and have a supportive impact on retail.


The business situation in wholesale worsened for both SMEs and large companies. For large companies, however, it was encouraging that the earnings situation improved. Moreover, these companies expect rising prices in the next quarter. Most of the other indicators worsened; for example, demand and sales volume. For SMEs, the picture was gloomier. Although demand improved slightly, and companies anticipate that the economy will trend slightly better over the next six months, both returns and sales were considerably lower in January than in October. Wholesale tends to be an leading indicator of future trends for the overall economy. The indicators for SMEs and large companies alike point toward a slight slowdown in momentum.


The overall upward trend for SMEs, which had persisted over the fourth quarter of 2016, came to an end in January. SMEs now also expect falling returns and prices, as well as lower demand. For large companies, by contrast, the momentum increased again slightly in January, and the business situation improved accordingly. Demand increased over the past three months, returns rose slightly, and companies expect rising prices. Guests from the eurozone, along with Swiss nationals, continue to make up the largest share of overnight stays. We expect a EURCHF exchange rate of 1.20 in the next 12 months, which should further increase demand and the occupancy rate.


The data is seasonally adjusted. Survey responses are evaluated using a diffusion index: the result represents average of companies reporting a positive or a negative trend. It therefore does not represent a percentage rate of change.


UBS Switzerland AG

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