Zurich, 06 December 2019 – The stabilization of various leading indicators admittedly assuaged worries of a sharp global economic downturn, but UBS economists still expect only subdued growth in all regions this year as well as next year. The SME barometer continued to deteriorate in the third quarter of 2019, falling from 1.08 to 0.49 points – while the barometer for corporations dropped from 0.54 to 0.34 points.

A fall in newly placed orders along with declining earnings in industrials and various indicators in construction and tourism were chiefly responsible for the downturn among the SMEs. The slightly lower reading of the barometer was attributable to fewer orders on hand for large companies and due to lower business activity compared to the previous quarter for architectural and engineering firms as well as poorer figures in individual indicators in construction and tourism.

UBS SME barometer


The business situation deteriorated between July and October for both SMEs as well as large companies. The SME barometer as well as that for large companies dropped to the lowest levels since early 2017. However, indicators for large companies moved in different directions. There was a striking improvement in new orders placed compared to the previous quarter. In addition, companies are more optimistic about the direction prices will take in the last quarter of this year. By contrast, new orders for SMEs only increased slightly compared to the previous year, while other indicators deteriorated.


The two company sectors moved in opposite directions in the services sector. While all indicators (business situation, demand and earnings positions quarter-on-quarter and expected prices) deteriorated for SMEs, they all posted slight improvements for large companies. By contrast, the indicators for business situation and demand revealed the biggest improvements for the large companies and deteriorations for SMEs.

Construction industry

The business situation for large companies in the construction industry improved for the fourth time in a row. Among other things, this upturn was driven by slightly higher earnings. Moreover, large companies remain optimistic regarding the further course of prices in the coming three months. The last time this was the case was at the beginning of the year. However, demand weakened somewhat and fell even more sharply among the SMEs. The business situation was also down slightly, with earnings declining marginally. What is more, the latter will probably not recover too quickly, since SMEs expect somewhat lower prices for the next three months.

Architectural and engineering firms

The business situation of architectural and engineering firms in the SME sector continued to improve between July and October. This recovery was driven by a brighter price outlook, increased demand and higher earnings. By contrast, the large companies' business situation worsened to some degree during the same period, but still remains at a very high level and was also better than that of the SMEs. Among other things, the downturn was due to lower demand while earnings improved. Furthermore, companies expressed greater optimism regarding the development of prices in the coming quarter.

Retail trade

There was no end to the worsening of the business situation for large companies and SMEs in the retail trade. Both are operating on the assumption of a further drop in prices in the next three months. However, they do expect higher turnover in the same period. For SMEs, earnings remained stuck at the level of the previous quarter between July and October. Nevertheless, this still represented the highest reading of the indicator for the last nine years. Large companies’ earnings even improved slightly.

Wholesale trade

The economic situation in wholesaling is still viewed positively by both SMEs as well as corporations, though less so than in the preceding quarter. The decline was only marginal for corporations, driven by lower earnings and the poorer outlook for price behavior in the next three months. On the other hand, demand picked up again slightly after a downtick in the previous quarter. The downturn was visible on a wide front for the SMEs. For example, both earnings as well as demand were lower. On top of this, SMEs also expect a downward trend in prices for the next three months


In tourism, the business situation deteriorated in the third quarter for both large companies as well as SMEs. But for the large companies, unlike the SMEs, it remained at a comfortable level. In general though, the economic situation for companies in the tourism sector has once again darkened. Irrespective of company size, demand and earnings in the third quarter were at a lower level quarter-on-quarter. While companies still expected higher prices in the coming three months, this indicator’s momentum was also decreasing.

UBS Switzerland AG


Sibille Duss
UBS Chief Investment Office Global Wealth Management (CIO GWM)
Tel. +41-44-235 69 54