KOF Economic Barometer: Outlook for the Swiss Economy Remains Favourable

In July 2017, the KOF Economic Barometer rose further – the new reading of 106.8 remains above its long-term average. The strongest impulses contributing positively to the dynamics of the Barometer stem from indicators for the tourist industry as well as from the ones for the export development. The indicators for the construction activity also show an upward tendency. On the other hand, the data for the manufacturing industry dampen the development. Barely changed has the outlook for domestic consumption as well as for the banking sector.

Although the manufacturing businesses assess their overall competitive position more favourably than before, incoming orders have weakened markedly. In particular, the prospects for the metal, wood processing and food industry have deteriorated. At the same time, the outlook has brightened in the textile sector and for machine manufacturers.

KOF Economic Barometer and reference time series: annual update

In September 2016, the scheduled annual update of the KOF Economic Barometer took place. The annual update of the Barometer concerns the following stages: redefinition of the pool of indicators that enter the selection procedure, update of the reference time series, a new execution of the variable selection procedure and a procedure to estimate missing monthly values of quarterly variables. The updated reference series is the smoothed continuous growth rate of Swiss GDP according to the new System of National Accounts ESVG 2010, released at the end of August 2015, which takes into account the release of the previous year’s annual Gross Domestic Product (GDP) data by the Swiss Federal Statistical Office. As a result of the indicator variable selection procedure, the updated KOF Economic Barometer is now based on 272 indicators (instead of 238 as in the previous vintage) from a pool of more than 400 potential indicator series. They are combined using statistically determined weights.