No. 174, June

The KOF Business Situation Indicator fell across the board in May. This means that the business situation is worsening for the second month in a row, and it is significantly less encouraging than it was in May last year (see chart G 10). Economic activity in Switzerland is currently sluggish.

One-fifth of Swiss industrial companies are moderately to heavily reliant on critical inputs from China. Their greatest dependence is in the electronics sector, followed by the pharmaceuticals and chemicals sectors. Just under one-fifth of firms are unable to assess their own reliance. The measures already taken or those that are planned reveal that production and procurement are being redirected towards Europe and Switzerland. These are among the findings of a KOF company survey.

Michael Graff, head of the Macroeconomic Forecasting research division at KOF, explains the advantages and disadvantages of the Swiss pension system and why pension reforms are so difficult to implement.