KOF Business Situation: Indicator Rises Further

In March, the Business Situation Indicator in the surveyed sectors either went up or remained almost unchanged (see T 3). So far, the retail sector has found it most difficult to work its way out of the trough. However, in March, retailers reported a substantial improvement in their business situation compared to the preceding month. The manufacturing industry continues to boom and the indicator went up further. After a slight slowdown in the previous month, the situation in the project engineering sector has picked up again. In the construction industry and the financial and insurance sector, the business situation has changed little. Wholesalers, hotel and catering businesses and the other service providers were last surveyed in January. At the time, all three sectors reported an improvement in their business situation.

From a regional perspective, the economy in the majority of the main FSO (Federal Statistical Office) regions was supported by positive momentum (see G 9). In Eastern Switzerland, the Zurich region, Central Switzerland, Espace Mittelland and Ticino, the business situation improved. By contrast, the indicator changed very little in North-West Switzerland. In the Lake Geneva region, the moderate business situation slowed down further.

Explanation

Graph G 8 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 9 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”.