KOF Business Situation Indicator: Business Situation Has Clouded Over

In November, the business situation clouded over in the majority of industries surveyed (see T 4). The indicator dropped most significantly in the retail sector where the situation had already been unsatisfactory. Complaints about the situation also increased in the manufacturing industry. Financial service providers and project engineering offices consider their situation to be slightly less positive than before. The construction industry, the only sector which bucked the downward tendency, reported an improvement in the business situation. Wholesalers, hotel and catering enterprises and the other service providers were last surveyed in October. The business situation in the wholesale trade and the hotel and catering sector showed some improvement. In contrast, the other service sectors suffered a slight setback.

From a regional perspective, November presents a heterogeneous picture (see G 11). The positive situation in Central Switzerland and East Switzerland has improved further. Espace Mittelland also reported a slight plus. In the Zurich region and Ticino, the business situation was mostly unchanged. In contrast, North West Switzerland, and especially the Lake Geneva region, reported a downturn.

Explanations of graphs

Graph G 10 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 11 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”.