UBS Consumption Indicator signals acceleration in consumer spending
The UBS Consumption Indicator rose again in April, signaling an acceleration in private consumer spending in Switzerland.
The UBS Consumption Indicator continued its upward trend in April, rising to 1.76 from the revised level of 1.68 in March.
The UBS Consumption Indicator is based on five sub-indicators: new car registrations, business activity in the retail sector, the number of overnight stays in domestic hotels by Swiss nationals, the consumer sentiment index, and credit card transactions processed by UBS at points of sale in Switzerland. While the increase in March was driven by a sharp rise in new car registrations, in April the Consumption Indicator was boosted primarily by significantly higher business activity in the retail sector. An improvement in the consumer sentiment index also had a positive effect.
The UBS Consumption Indicator is now well above its long-term average of 1.5. According to estimates by the State Secretariat for Economic Affairs, in the fourth quarter of last year private consumption was 2.1% higher year-on-year. The rise in the UBS Consumption Indicator and other favorable indicators (including the consumer sentiment index and surging retail sales) indicate that growth in consumption further increased in the first quarter of this year, buoyed by low interest rates, immigration and a rapidly recovering job market.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-over-year change, in %, UBS Consumption Indicator: index level)
Caesar Lack, Economic Research Switzerland
Tel. +41 44 234 44 13
Hans-Peter Hausheer, Economic Research
Tel. +41 44 234 67 32
UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research