No. 150, April

The business situation of Swiss companies continued to ease in March. After hitting a low in January, the Business Situation Indicator rose this month for the second time in a row (see G 18). This improvement is visible across all sectors surveyed. The recovery of the Swiss economy is strengthening.

While the economies of China and the United States have already rebounded significantly from the coronavirus pandemic, the recovery in Europe has been sluggish. From the second quarter onwards, however, KOF expects this recovery to progress in Europe as well thanks to the vaccination campaigns and a slight easing of restrictions.

Far fewer companies went bankrupt last year than would have been expected in normal times. This is due to the legal and economic support measures introduced. A sudden wave of bankruptcies is still not expected.

The seven major Swiss regions differ significantly in some cases with regard to production factors but not in terms of the results of the innovation process. The differences in input factors appear to be primarily due to structural factors. It is small firms in the construction and service sectors that cause these differences. At the same time, these types of firms make a smaller contribution to the results of the innovation process, which reduces the regional differences in innovation success.

On paper, employment in Switzerland has hardly fallen despite the coronavirus crisis. But a brief look behind the scenes shows that the pandemic and its economic impact have also affected the labour market. Many companies will remain reluctant to create new jobs on a large scale until the current uncertainty has subsided.