KOF: Business Conditions in Switzerland Have Improved Across the Board

Following two consecutive months of decline, the KOF Business Climate Index rose in July across nearly all economic sectors surveyed, the KOF Institute announced on Wednesday. The improvement is thus quite broad-based, and conditions are now even more favorable than they were at the beginning of the year.

The improvement in business conditions was particularly pronounced in wholesale trade, manufacturing, and financial and insurance services, according to the report. It was somewhat less pronounced in the construction industry, the project planning sector, other services, and retail trade.

According to the quarterly survey of 4,500 companies, the situation is deteriorating in the hospitality sector, including restaurants and lodging facilities. The situation has worsened particularly in hotels in major cities.

Expectations point to an economic recovery

According to the KOF survey, business expectations have also improved significantly. The companies surveyed across all economic sectors have become more confident about the coming half-year. According to the KOF, this suggests that the Swiss economy is gaining momentum.

Confidence for the coming six months is also on the rise in the hospitality industry, for example. However, restaurants do not yet expect a turnaround for the better in the current quarter.

Price increases remain moderate

According to the survey, companies are planning price increases at almost the same rate as in the previous month. Companies in the construction industry, retail trade, and other services are somewhat more cautious about raising prices.

On average, the respondents expect consumer price inflation of 1.2 percent over the next twelve months, as in the previous survey.