Business situation continues to ease
The KOF business situation in the Swiss private sector brightened in June for the second month in a row. Companies are also more confident about developments over the next six months than they have been for the past two months. The Swiss economy is slowly emerging from the trough.
In the manufacturing sector, the business situation indicator rose slightly. In the project planning sector and in financial and insurance services, the business situation brightened significantly. For companies in other service sectors, the business situation remained stable. In the retail trade, the business situation deteriorated slightly after a strong improvement in the previous month. In the construction industry, the business situation indicator declined slightly.
Business expectations for the coming six months are more confident across the board. Only the construction industry is bucking the trend and dampening its expectations. In the manufacturing sector, expectations are improving for the second month in a row. Weighted according to market orientation, the expectations of EU-exposed companies are stable, while those of US-oriented companies are slightly less negative than before, not adjusted for seasonal factors. However, uncertainty remains very high among companies that export to the US. Companies in the financial and insurance services, retail, other services and project planning sectors are also more confident in their business expectations than before.
A look at the regions
From a regional perspective, the business situation is improving in Central Switzerland, Northwestern Switzerland, the Zurich region and the Espace Mittelland. In the Lake Geneva region, the business situation remains unchanged, while in Ticino it is deteriorating slightly.
Economic clock
The KOF business situation reflects 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, this did not lead to an acceleration in growth or an upturn. Nor are there any signs of any significant change in this situation at the end of the first half of 2025.
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.
Chart 2 shows the business situation in the main regions defined by the Swiss Federal Statistical Office. The regions are coloured differently to reflect their business situation. The arrows within the regions indicate the change in the situation compared with the previous month. An upward-pointing arrow, for example, indicates that the situation has improved compared with the previous month.
The Business Situation Indicator in the KOF Business Cycle Clock (Chart 3) 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.
Ansprechperson
KOF Konjunkturforschungsstelle
Leonhardstrasse 21
8092
Zürich
Switzerland