Business situation gloomy

Workers in a warehouse.

(28.12.2022) Swiss companies are facing a mixed year-end outlook. The KOF Business Situation Indicator, based on approximately 4,500 company reports, stood at 20.2 in November, down 7.7 points from October.

The manufacturing industry continues its downward trend that began in July (when the index stood at 35.4), dropping to 21.4 in September, 20.4 in October and 15.7 in November. With stable results since the beginning of 2022 (41.0 in January, and 42.7 in November), the construction sector seems to be doing well for the time being. Engineering firms are also faring relatively well, although the sector recorded a 6.3-point drop in November compared to the previous month.

After a slight recovery in October, financial services slumped from 34.2 to 20.8, a 13.4-point month-over-month decline. Hospitality, last assessed in August 2022, also shows signs of weakness, falling from 35.6 to 13.3 quarter-over-quarter.

The retail trade shows no clear signs of improvement either since its decline to 7.7 in August (-10.9 points). In November, the sector's index showed a tentative recovery to 12.6 quarter-on-quarter.

Regarding regional breakdowns, Eastern Switzerland and the Canton of Zurich showed the strongest decline in November. In Central- and North-Western Switzerland, the business situation index also fell, but less sharply, while in the Lake Geneva region and Ticino no significant changes were observed.

In addition, the KOF Business Cycle Clock, with its index equivalent to the correlation between the KOF Business Situation Indicator and the KOF Economic Barometer, indicates that the Swiss economy is currently in a cool-down phase.


Last modification 28.12.2022

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