KOF Business Situation Indicator Ends Year on a Rise

Compared to the beginning of 2017, all sectors covered by the monthly surveys improved their situation (See T 1). The manufacturing industry gained a lot of ground, although the current situation is no longer quite as positive as in November. Both the retail and the financial/insurance sectors reported a better situation compared to the beginning of the year, with both sectors also improving over the preceding month. There has been a slight improvement in the business situation in both the construction and the project engineering sector, although they have followed different trends since the last month. While the business situation improved in the project engineering sector, the indicator for the construction sector declined. Wholesale, hotel and catering and the other service providers were last surveyed in October. At the time, wholesale and hotel and catering had reported an improvement in their business situation. The indicator for the other service providers dropped slightly.

From a regional perspective, the business situation trend presented a very diverse picture. While the business situation improved in the Zurich Region, Eastern Switzerland and the Lake Geneva Region, it changed very little in Espace Mittelland and Ticino.  In contrast, the business situation deteriorated slightly in Central Switzerland and North-West Switzerland. From an annual perspective, the business situation thus improved in all of the FSO regions with the exception of Central Switzerland where the indicator ended the year on a less positive note.

Explanation

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 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”.