KOF Business Situation: Business Situation Slips Back – Financial Services Face Headwind

The latest slow-down in the business situation is predominantly due to the financial and insurance service providers (see G2). Similarly, the situation in the project engineering sector is no longer quite as favourable as in the preceding month. The construction industry has remained stable while the manufacturing industry and the retail trade have picked up to some degree. This represents a continuation of the recovery in the manufacturing industry where export-oriented companies in particular have been reporting a gradual easing of the business situation for a few months now. The wholesale trade, hotel and catering sector and other services were last surveyed in April. At the time, the wholesale trade and the hotel and catering sector considered their business situation to be less unfavourable than three months previously. The other service providers were affected by slight downward pressure.

At the regional level, the business situation in the Zurich region suffered a setback in June. This is consistent with the general industry pattern since financial and insurance service providers, whose overall business situation has weakened, are well-represented in the Zurich region. In Ticino, the Lake Geneva region and Eastern Switzerland, the situation has hardly changed. In contrast, the comparably favourable situation in Espace Mittelland, in North-West Switzerland and especially Central Switzerland has improved further.

Note:

Graph G 6 presents the KOF business situation across all sectors covered by the survey. The business situation in sectors which are surveyed on a quarterly basis is kept constant during the intervening months.

Graph G 7 presents the business situation and the current changes. In the case of the monthly surveys, the changes over the previous month are highlighted. In the case of the quarterly surveys, the changes between the latest quarterly value and the previous quarter are marked. The quarterly values are updated in the first month of every quarter and are not adjusted during the intervening months.

Graph G 8 presents the business situation in the main regions according to the Federal Statistics Office. The regions are coloured according to business situation. The arrows in the regions indicate the change in the business situation compared to the previous month. An upward-pointing arrow, for instance, indicates that the situation has improved over the previous month.

The KOF business situation is based on over 4,500 reports by Swiss companies. Every month, businesses are surveyed in the following sectors: industry, retail trade, construction and project engineering as well as financial and insurance services. Businesses in the hotel and catering sector, wholesalers and the other service providers are surveyed in the first month of every quarter. Among other questions, the businesses are asked to assess their current business situation. They may rate their situation as ‘good’, ‘satisfactory’ or ‘bad’. The balance of the current business situation is the percentage difference between the ‘good’ and ‘bad’ responses.