KOF Business Situation: Still Brightening Up

September’s rise in the Business Situation Indicator is almost exclusively due to the improved situation in the retail trade (see T 1). Although the overall retail trend is still rather unsatisfactory, fewer retailers are complaining about an unfavourable situation than in the past months. Very little has changed in the financial sector, manufacturing industry and project engineering sector. The situation in the construction industry, in contrast, is no longer quite as favourable as in the preceding month. Wholesalers, hotel and catering enterprises and the other service providers were last surveyed in July. At the time, the sectors were following very different trends. While the business situation had improved greatly in the wholesale sector and significantly in the service sector, the hotel and catering industry reported a substantial setback.

From a regional perspective, the business situation has stabilised specifically in North-West Switzerland (see G 18). Otherwise, the improvement in the retail sector did not have any visible effect in the regional break-down. All other main regions according to the Federal Statistical Office (FSO), i.e. the Zurich region, Central Switzerland, Ticino, the Lake Geneva region and Espace Mittelland, reported a slight downturn.

Explanations of Graphs

Graph G 17 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 18 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 more than 4,500 reports from businesses in Switzerland. Each month businesses are surveyed in the economic sectors of industry, retail trade, construction, project engineering and financial and insurance services. Businesses in the hotel and catering sector, wholesalers and other service providers are surveyed quarterly in the first month of each quarter. Businesses are requested, amongst other things, to assess their current business situation. They may class their situation as “good”, “satisfactory” or “bad”. The balance of the current business situation is the percentage difference between the answers “good” and “bad”.