Tourism pushes up consumption in Switzerland

The climate of consumption is still improved in Switzerland in June, for the third consecutive month: the UBS index rose 1.34 points, compared with 1.24 points in May, the highest level since June 2015.

According to UBS economists, the progression is mainly due to the favorable development of tourism and to a slight improvement in retail trade. The situation on the labor market remains tight, however, a factor affecting consumer confidence.

More specifically, the increase in overnight stays in May – up 1.3% from the previous year – is mainly attributable to the guests natives, who made up 60% of the additional nights. On the other hand it is obvious even a slight improvement in the retail sector, despite the decline in sales strong – on the order of almost 10% compared to last year in the clothing and footwear – and still exchange rates do not favorable. The survey carried out in the field by the economic research center at ETH Zurich (KOF) leads to a cautious optimism.

Private consumption increased by 2.8% yoy in the first quarter, an increase much higher than the previous three months. Although even in the next few months, private consumption should remain a pillar of growth, it is difficult to record the strong growth observed in the first quarter: both the tension on the labor market and the immigration slowdown represent an evolution of the restraining factors for the most dynamic .

With an advance of one to three months on the official figures, the UBS indicator gives an idea of the trend in Swiss private consumption, which with more than 50% are the most important component of Swiss GDP. It is calculated based on six variables: new car sales, sales performance in the retail trade, the number of overnight hotel stays by Swiss nationals in Switzerland, index of consumer confidence, employment trends and sales of credit cards generated through UBS in national outlets.

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