Switzerland: KOF economic barometer declines for fourth straight month in June
June 28, 2019
The KOF economic barometer—a leading composite indicator for the Swiss economy, which forecasts a six-month period—dropped to 93.6 points in June from May’s downwardly revised 93.8 points (previously reported: 94.4 points). Consequently, the indicator fell further below the series’ long-run average of 100 points, suggesting the economy will expand at a softer pace in the short-term than its 10-year average rate.
The minor deterioration in June was the result of a worse performance in the manufacturing sector and weakening private consumption. In the manufacturing sector, firms’ less optimistic view of intermediate products and order backlogs was responsible for the decline. Moreover, activity in the banking and insurance sector slowed in the month. More positively, foreign demand was regarded more favorably.
Amid intensifying global trade tensions, the KOF indicator has remained entrenched below the 100-point threshold for the duration of H1, suggesting the economy’s growth in Q2 and beyond will likely be subdued following Q1’s surprisingly robust GDP outturn.
Author: Lindsey Ice, Economist