Outlook for the Labour Market Remains Positive

The prospects for the Swiss labour market remain encouraging. The Employment Indicator now stands at 5.1 points, having hit 5.8 points (revised upwards from 5.7) in the preceding quarter. Although the slow but steady rise in the KOF Employment Indicator, which has been ongoing since the beginning of 2015, has now come to an end, it nonetheless remains fairly high on a historical comparison. The last time it exceeded five points in two successive quarters was back in 2011.

The Employment Indicator is calculated from the quarterly KOF Business Tendency Surveys. When conducting these surveys, KOF asks firms to assess their current staffing levels and to say whether they plan to alter them over the coming three months. On balance, a majority of these companies are currently of the view that their workforce is too small. Consequently, most of the firms surveyed expect to increase their headcount in the next three months. The KOF Employment Indicator represents the average of the surveyed companies’ employment assessments and expectations.

Highly encouraging employment assessments in ‘other services’

The survey findings hold out the prospect of encouraging employment trends across various sectors. The industry-specific employment indicators for manufacturing, construction and wholesaling, for example, are all in positive territory. The largest positive contribution to the current indicator comes from the survey results for providers of ‘other services’, which include firms engaged in information technology, communications, transport, healthcare and social services. The Employment Indicator for the project engineering industry has also risen sharply this year. The upbeat assessments coming from this fairly small sector are relevant because it is a key indicator of future trends throughout construction. On the other hand, the responses given by the retailers, hotels, restaurants, banks and insurers surveyed by KOF were slightly more cautious. Surveys suggest that these sectors can expect their employment levels to flatline or even fall.