KOF Business Situation Indicator: Slight Improvement

In May, the business trend in the surveyed sectors was heterogeneous. Financial and insurance service providers were the main drivers of the indicator’s upward trend. The improvement in the manufacturing industry, which started at the beginning of the year, continued, albeit with lower dynamics. In contrast, the situation in the project engineering and construction industries did not quite keep up with the previous month. Retail businesses also reported a slight deterioration compared to the preceding month. Wholesalers, hotels and catering businesses and other service providers were last surveyed in April. At the time, wholesalers and the other service providers reported a significant improvement in their business situation. The business situation indicator went up slightly in the hotel and catering sector.

In May, the business situation in the regions also followed different trends. Companies in Ticino benefited from substantial tail wind. So did enterprises in the Lake Geneva region, albeit to a lesser degree. In the other major regions according to the BFS – Central Switzerland, Zurich region, North-West Switzerland, Eastern Switzerland and Espace Mittelland – the business situation remained more or less unchanged.

Explanation:

Graph G 6 shows the KOF business situation for all sectors of the economy covered by the survey. For sectors of the economy that are only surveyed quarterly, the business situation is maintained at the same level during the intervening months.

Graph G 7 reports the business situation in the major regions used by the Federal Statistics Office. The regions are coloured differently depending on the business situation. The arrows within the regions indicate the change in the business situation compared to the previous month. An arrow pointing upwards means that the situation has improved compared to the previous month.

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