Switzerland: KOF economic barometer confirms weaker economic momentum at outset of 2019
The KOF economic barometer—a leading composite indicator for the Swiss economy forecasting a six-month period—continued to slump at the start of the year, falling to 95.0 points in January from a revised 96.4 points in December (previously reported: 96.3 points). Consequently, the indicator now lies further below the series’ long-run average of 100 points, suggesting the economy will expand at a weaker pace in the short-term than its ten-year average rate.
January’s decline was largely due to companies’ more downbeat sentiment in the processing industry and service sectors, while export prospects worsened in the month. The manufacturing sector also saw weaker confidence in January, and firms were more downtrodden about the competitive situation, new business inflows and output. On the other hand, improving production capacity in the manufacturing sector help to offset the drag on the index.
January’s poor result represents the fourth back-to-back decline in the economic barometer and reaffirms the Swiss economy is slowing amid intensifying headwinds of slower growth in the region and a dampening investment climate.