KOF Economic Barometer: COVID-19 foils the start of the year

The KOF Economic Barometer drops to 96.5 points in January and thus below its long-term average of 100. This is a decline of 7.6 points compared to the previous month. In December, the barometer still stood at 104.1 points (revised from 104.3) and thus above average. Responsible for the decline are in particular the indicator bundles for accommodation and food service activities as well as other services. But the outlook for manufacturing, financial and insurance services and private consumer demand is also less favourable than before. The outlook for construction is stable and foreign demand could provide a stronger impulse.

In the goods producing sector (manufacturing and construction), the indicators for almost all aspects relevant to the business cycle are weakening, including for the purchase of intermediate products, the business situation, export opportunities, orders on hand and production. Only the indicators for the national and international competitive situation developed noticeably positively.

In the manufacturing sector, the electrical, metal and textile industries as well as the paper industry are feeling a stronger headwind. However, there are also areas where the indicators have developed positively. Specifically, these are the machinery industry, the wood, glass, stone and earth industry and the food and beverage industry.