KOF Business Situation: Indicator on the Rise

The rise of the Business Situation Indicator in September was reported across all sectors. In the manufacturing industry, the situation is once again significantly more favourable than in the preceding month (see T 1). The positive situation in the financial and insurance sector improved further. Even the retail trade reports an easing of its comparatively difficult situation. Business in the project engineering and construction industries has changed little. Wholesale and hotel & catering were last surveyed in July. At the time, both sectors had indicated a substantial improvement in their business situation. The indicator for the other service providers dropped slightly.

From a regional perspective, the business situation trend also presented a relatively uniform picture with the Business Situation indicator rising in the majority of the main FSO regions. The only exception is Central Switzerland, where the business situation changed very little. Ticino reported a very small improvement, while the indicator rose substantially in the other main regions – Espace Mittelland, Eastern Switzerland, Zurich Region, North-West Switzerland and the Lake Geneva region (see G 11).

Explanation

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”.