KOF Business Tendency Surveys: Business situation stabilises
The KOF Business Situation Indicator moved minimally upwards in February, having previously fallen for two months in a row. Companies are once again becoming slightly more cautious in their business expectations. The Swiss economy was tensely calm in February.
The development of the business situation was mixed across the economic sectors in February. In the manufacturing and construction sectors, the business situation improved for the first time in two months. The business situation indicator also rose slightly in the financial and insurance services sector. By contrast, the business situation in the project engineering sector and retail trade is cooling.
From a regional perspective, the development of the business situation in February is also heterogeneous. The business situation indicator rose in Central Switzerland and the Lake Geneva region. It barely moved in Espace Mittelland, Northwestern Switzerland and Eastern Switzerland. The business situation deteriorated in the Zurich region and in Ticino.
The KOF Business Situation illustrates the current economic situation of companies. The KOF Economic Barometer, on the other hand, is an indicator of the economic outlook. The economic clock shows that there were signs of a very slight economic recovery throughout 2024. However, there was no acceleration in development and no upturn. There are no signs of a significant change in this situation in the first few months of 2025 either.
Explanation:
Chart 1 shows the KOF Business Situation Indicator across all sectors included in the survey. The business situation of sectors that are only surveyed quarterly is kept constant in the interim months.
The Business Situation Indicator in the KOF Business Cycle Clock (chart 2) is plotted against the KOF Economic Barometer. The indicator reflects the current business situation, while the barometer is a leading indicator of changes in activity. The clock can be divided into quadrants. During the recovery phase the business situation is below average but growth prospects are above average. At the peak of the economic cycle the situation and prospects are both above average. During the slowdown phase the situation is above average and prospects are below average. At the bottom of the economic cycle the situation and outlook are both below average. Ideally the chart runs through the quadrants in a clockwise direction.
The KOF Business Situation Indicator is based on more than 4,500 reports from firms in Switzerland. Companies in the manufacturing, retail, construction, project engineering, and financial services and insurance industries are surveyed monthly. Businesses in the hospitality, wholesale and other services sectors are surveyed during the first month of each quarter. These firms are asked, among other things, to assess their current business situation. They can rate their situation as either ‘good’, ‘satisfactory’ or ‘poor’. The net balance of their current business situation is the difference between the percentages of ‘good’ and ‘poor’ responses.
Contact
KOF Konjunkturforschungsstelle
Leonhardstrasse 21
8092
Zürich
Switzerland