According to ETH’s (KOF) economic research center’s economic survey in October, companies are still largely doing well, but the business health indicator has dropped to just as low as it was last June 2021.
The indicator dropped to 20.2 points in October after holding just under 28 points in September. KOF announced that the Swiss economy has noticeably lost momentum.
Support, triggered by the loosening of corona measures, is slowly fading. This is particularly evident in sectors that have benefited greatly from the recovery, such as the hospitality and services sector.
But the jobs indicator also fell in almost all other economic sectors examined in October, such as financial and insurance services or wholesale. However, while the manufacturing sector, and industry in particular, is clearly losing momentum, only the construction sector can still see some positive development.
In industry, the business status indicator fell for the fourth month in a row, the statement continues. Currently, stocks of foreign orders in particular are considered less favorable than before. According to KOF, the stronger Swiss franc should have a negative effect.
Inflation also affects the economy. As a result, more and more companies want to raise prices. According to KOF, prices have recently increased again, especially in the hospitality industry, among service providers and in the manufacturing sector.
Economists meanwhile noticed a certain loosening in their supply chains. Lack of materials and pre-products is still a problem for companies, but this has shrunk. For example, wholesale trade expects delivery times to increase less frequently than before, and both the manufacturing and construction sectors no longer report shortages of materials and pre-products.
In construction, more weight has been given to the lack of personnel for several months. Meanwhile, inflation and staff shortages are likely to lead to higher wages across all sectors. According to the survey, KOF tentatively estimates that wage growth across all sectors should average 2.4 percent.
KOF conducts the business survey quarterly. For the study, more than 4,500 companies from industry, construction and the most important service sectors were surveyed.
(SDA)