Swiss companies lowering their forecasts

Business activity cooled in April, particularly in financial and insurance services and in other services. Business in the construction industry, the project engineering sector and the retail trade is also slightly less buoyant than before. In contrast, the Business Situation Indicator revealed a fairly encouraging trend in manufacturing, wholesale and food services. This means that the picture is not uniform across all sectors, with recent growth in the key sector of other services acting as the main constraint.

Almost all sectors are adopting a more sceptical stance

A different pattern can be seen in firms’ business expectations for the next six months. Companies in the manufacturing sector are adjusting their expectations downwards for the fifth month in a row, with sceptical sentiment prevailing on balance in April for the first time since the end of 2022. Firms in financial and insurance services, construction, project engineering, wholesale and hospitality are also lowering their forecasts. Only the retail trade and other service providers are more confident about future trends than they were in the previous month. If we compare the forecasts for these two sectors with those made at the beginning of this year, however, they too have become more cautious.

Companies anticipating lower wage increases than before

Firms are expecting average salary rises of 1.3 per cent over the period up to twelve months from now. They are therefore forecasting lower salary increases than in the January survey (1.5 per cent) and in last year’s April survey (1.6 per cent). Companies in the manufacturing and hospitality sectors in particular are expecting lower rises than in January. Overall, firms have become more restrictive in their workforce planning and, on balance, no more staff increases are scheduled for the next three months. Reports of staff shortages have grown in the construction and hospitality industries, are similarly frequent in manufacturing as in the last quarter and are decreasing in the other sectors (financial and insurance services, project engineering, wholesale and other services).