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The KOF Economic Barometer fell slightly again in August and thus settled at the below average level observed since May. At 91.1 points, the barometer continues to signal below-average development. Accordingly, the Swiss economy has to expect a somewhat unfavourable economic situation in the near future.

This year’s round of pay bargaining could be another meagre one in real terms for wage earners. Companies expect to see wages increase by an average of only 2 per cent over the next twelve months. Since they are forecasting inflation of over 2 per cent for the same period, they are not anticipating any real pay increases. This is the result of a KOF survey of almost 9,000 businesses in Switzerland.

In August, the Global Barometers increase for the second month in a row across the regions. The Coincident Barometer continues to slowly improve in 2023 while the Leading Barometer advances more rapidly, approaching almost the neutral level of 100 points.  

The KOF Business Situation Indicator for the Swiss economy, which is calculated from the KOF Business Tendency Surveys, fell significantly in July. Business activity is less buoyant than it has been for two years. In contrast, upward pressure on prices is decreasing in almost all sectors of the economy. The shortage of skilled workers is no longer quite as acute as it was recently.

Although the KOF Employment Indicator is falling in the third quarter of 2023, it remains in clearly positive territory. The deterioration in the employment outlook is limited to individual sectors which are affected more by global economic trends. Overall, we still expect to see employment growth in the Swiss labour market.