The UBS Consumption Indicator climbed from 1.63 to 1.66 points in November, continuing the positive trend seen in recent months and pointing to further growth in private consumption in the months ahead. The main reasons for the good news are the less gloomy outlook in the retail sector and the increase in new car registrations.
Zurich, 30 December 2015 - The monthly survey of the KOF Swiss Economic Institute at ETH Zurich indicates an encouraging trend in retail business, with November's index values for sales slowly approaching the levels seen prior to the abandonment of the EURCHF minimum exchange rate. Car sales also picking up again. November saw 11% more new cars registered compared with the same month last year. Tourism, by contrast, was more subdued. Hotel owners are increasingly feeling the pressure from foreign competitors, who have become cheaper in relative terms.
Third-quarter private consumption grew 1.2% year-on-year in real terms, a trend that may well gain even greater momentum in the fourth quarter thanks to falling consumer prices. The retardant effects of the strong franc, however, are gradually becoming evident. Rising unemployment will likely limit disposable household income and thus restricting growth in private consumption in the medium term.