Switzerland: KOF economic barometer tumbles further in December
The KOF economic barometer—a leading composite indicator for the Swiss economy forecasting a six-month period—fell to 96.3 points in December from a downwardly revised 98.9 points in November (previously reported: 99.1 points). Consequently, the indicator now lies 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.
The continued deterioration in December stemmed from falling confidence in the manufacturing and construction sectors. Manufacturing firms were more pessimistic about new business inflows and input purchasing activity. Moreover, manufacturers had a more negative assessment of output and employment. In addition, prospects for the financial sector and private consumption also weakened in December. On a brighter note, more favorable export prospects helped mitigate the index’s fall.
December’s dismal performance marked the third consecutive decline in the economic barometer and suggests the Swiss economy is hitting a soft patch heading into 2019. Growing headwinds from a less favorable external environment and slower growth in the euro area could dampen growth prospects moving forward.