KOF Employment Indicator: bleak outlook for the labour market
The KOF Employment Indicator is continuing to recover following its historic slump in the second quarter of 2020. However, the Indicator remains firmly in negative territory at minus 7.1 points. Businesses in the hospitality, wholesale and industrial sectors are especially pessimistic.
The KOF Employment Indicator for October stands at minus 7.1 points. This means that it is at least higher than it was when it hit a historic low of minus 20.5 points in the second quarter of 2020, and it has risen slightly compared with the third quarter of this year (minus 11.7 points, revised upwards from minus 12.9). Nonetheless, we are not out of the woods yet because the Indicator remains firmly in negative territory; this means that there are still many more companies planning to shed jobs than those looking to hire additional workers. Moreover, it is unclear whether the Indicator will be able to continue its recovery over the next few months. A large proportion of firms gave their assessment of their employment situation in the first half of October, i.e. before the coronavirus restrictions were recently tightened.
KOF Employment Indicator (continuously updated)
Indicator for the hospitality sector deep in negative territory
Strong differences between sectors are evident. Despite having staged a modest recovery, hospitality reports by far the lowest indicator value of all sectors (minus 25.4 points). Many of the firms surveyed in this sector expect to shed jobs over the next three months. The outlook is also bleak in the wholesale (minus 13.8 points) and manufacturing (minus 13.6 points) sectors. Forecasts for manufacturing are currently at the level they were at during the Swiss franc shock of early 2015. By contrast, most insurance companies expect to increase their staffing levels. The Indicator for the other service sectors is close to zero.
The Employment Indicator is calculated from KOF’s quarterly Business Tendency Surveys. The evaluations for this quarter are based on the responses of more than 4,500 firms that were asked about their employment plans and expectations in October. The findings of the survey suggest that the COVID-19 crisis will lead to further job losses over the coming weeks.
The full press release can be found Downloadhere (PDF, 310 KB)vertical_align_bottom.
KOF Employment Indicator
The KOF Employment Indicator is calculated on the basis of the quarterly KOF Business Tendency Surveys. As part of these surveys, KOF asks private businesses in Switzerland to assess their current staffing levels and to state whether they intend to change them over the coming three months. A positive indicator figure means that the number of surveyed companies considering staff cuts in the reference quarter is smaller than the number of companies intending to create jobs. It has been shown in the past that these assessment anticipate actual trends on the labour market.
Click here for more information about the Indicator and its methodology.
Contact
KOF Konjunkturforschungsstelle
Leonhardstrasse 21
8092
Zürich
Switzerland