KOF Employment Indicator: Scores of Companies Plan to Create New Jobs

The KOF Employment Indicator has undergone a slow but steady recovery since the slump following the Swiss franc shock in early 2015. Having risen to 5.7 points in August, the Indicator is now slightly higher than three months ago and 5 points higher than a year ago. The Employment Indicator is calculated on the basis of the quarterly KOF Business Tendency Surveys. As part of the surveys, companies assess their current employment levels and state whether they intend to adjust them in the coming three months. On balance, the majority of the firms currently believe that their headcount is too low. The surveys suggest that the companies intend to change this situation in the next few months.

Hope for a further recovery in the hotel and catering industry

In terms of individual sectors, the responses of hotel and catering businesses stand out. For the first time since the beginning of 2008, the balance of employment plans and expectations has changed from negative to roughly equal. The Business Tendency Surveys thus raise hopes that the last three months’ recovery of the employment situation will continue. Optimism among the other service providers, for instance IT, communication, transport, healthcare and public welfare companies, is also at the highest level in a long time. Further job creation is expected in these sectors. The Employment Indicator for the industrial sector is also slightly positive, while the number of positive and negative responses is roughly equal in the construction sector. Retail is faring less well with the sector’s Employment Indicator firmly mired in the negative.