Zurich, 04 December 2018 – Despite the drop in the value of the barometer for SMEs, the picture in its sub-indicators is mixed. Month-on-month, the indicators have kept the barometer up, while expectations and the majority of indicators worsened year-on-year. The drop in incoming orders and the production level was particularly severe in terms of the latter. On the other hand, these same two indicators recorded marginal gains month-on-month. With regard to large companies, differences between the individual indicators were more pronounced. The following indicators made a negative contribution to the barometer: incoming orders, both year-on-year and month-on-month, and year-on-year production. On the other hand, large companies are more optimistic and expect higher incoming orders and a higher production level month-on-month. Despite the decline in the value of the two barometers, the SME barometer at 0.65 points was once again higher in October than the large-company barometer at 0.45 points.
SMEs assessed the economic situation in the construction sector better
In the construction sector, large companies revealed a slightly worse assessment of the business situation in recent months than at the start of the year. This development was driven by poorer profits and stagnating order levels. Large companies are more optimistic than SMEs only with regard to price expectations, expecting stagnating prices in the next three months. By contrast, among SMEs order levels increased and profits fell less significantly than among large companies. Overall, SMEs assessed the economic situation as being better than large companies. In terms of architecture and engineering firms, SMEs are also more positive about the business situation than large companies.
Positive evaluation of the economy in the service sector
In the service sector, economic sentiment is better than in industry. At the start of the fourth quarter, large companies assessed the economic situation more positively than at any time since 2011. SMEs were also more optimistic in their assessment of the business situation, but were a long way from matching the positive sentiment values of large companies. This could be the result of lower demand and lower returns. Only when it came to price expectations for the next three months was there no difference between the two groups of companies. Both expect prices to fall slightly.
Tourism experiences headwinds again
The business situation in the tourism industry worsened for both SMEs and large companies. While the business situation of large companies worsened abruptly in the fourth quarter, among SMEs it continuously lost ground from quarter to quarter. Companies reported pleasing results with respect to returns. For the first time in five years, these stagnated at the level of the previous month among SMEs. While momentum declined somewhat among large companies, returns also improved there in the fourth quarter.
At the start of the fourth quarter, SMEs in the retail sector evaluated the situation more negatively than in the middle of the year. This was due to falling returns and the unexpected price increases for the next three months. Momentum has also declined among large companies. This slightly weaker momentum in the retail sector may also be driven by the slight increase in the strength of the Swiss franc again.