KOF Business Situation Indicator: Situation Remains Stable for Swiss Businesses

Whilst the overall position is stable, the dynamics differ within individual sectors of the economy. The downward trend within the manufacturing industry is continuing, falling for the ninth month in a row. Manufacturers are suffering from the difficult international economic climate.

In the construction industry the business situation is also not as positive as last month. On the other hand, the position has improved once again for retailers and in the project engineering sector. The business situation has also improved for financial and insurance service providers. Wholesalers, the hotel and catering companies and the other service providers were last surveyed in July. The hotel and catering sector and other service providers have recently reported an improvement, whereas the situation for wholesalers has worsened slightly (see T 1).

At the regional level, the picture is also heterogeneous. Whilst the business situation has improved in the Zurich region and the Lake Geneva area, there has been a slowdown in Central Switzerland, Eastern Switzerland and Ticino. The situation is essentially unchanged in Espace Mittelland and North West Switzerland.

Explanation

Graph G 4 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 5 presents the business situation in the main regions pursuant to the Federal Statistical 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, companies 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 on a quarterly basis in the first month of each quarter. Among other questions, the companies are asked 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”.