Business Situation Indicator in Freefall – Historic Challenge for Service Providers

KOF Business Situation Indicator (constantly updated)

The COVID-19 pandemic is hitting all sectors of the economy hard. Nevertheless, the exact situation varies from one sector to another. Manufacturing industry continues to draw some benefit from its encouraging performance in the first few months of this year. Despite a sharp downward correction the business situation here is not yet as bad as during the financial crisis of 2009, although the demand and production outlook for the near future is very negative.

In the construction industry and at project engineering firms the Situation Indicator is falling more sharply than ever before month on month. Nevertheless, the adverse business situation is not predominant here; at least as many companies are reporting a healthy situation as a bad one. The same applies to the financial sector.

In the hospitality and retail sectors the Business Situation Indicator has collapsed and the situation is very difficult. However, other service providers are also facing a historic challenge. Overall, business in this sector is faring significantly worse than during the financial crisis.

Special questions on the Coronavirus effects

Responses to specific questions from selected sectors indicate that the slump in demand is considered to be more serious than restrictions on a company's own production or service provision owing to staffing restrictions or a lack of preliminary products. In addition, companies in Italian-speaking and French-speaking parts of Switzerland are reporting adverse effects significantly more frequently than firms in German-speaking parts of the country.