CH: SECO Consumer Climate

February 7, 2017 12:45 CST

Consensus Actual Previous
Level -11 -3 -13

SECO's January consumer climate survey found a significant improvement in sector confidence. At minus 3, the headline indicator was up fully 10 points versus its October reading and at its highest level since July 2014. It also moved back above its long-run average (minus 9)

The overall gain was attributable to a more optimistic assessment of the economic outlook (minus 6 after minus 14) and future unemployment (48 after 58). Households were similarly more upbeat about their financial situation (0 after minus 6). There was also good news on buying intentions (4 after minus 2).

However, the inflation update was less reassuring. Hence, both the view of recent developments (33 after 34) and expectations for the coming twelve months (42 after 44) were hardly changed from last time.

Still, most of the sub-indices in today's survey are now either above their historic norms or have moved appreciably in that direction. Apart from the softness of prices, the SNB should be moderately happy with the results.

The State Secretariat for Economic Affairs (SECO) compiles a quarterly survey of consumer attitudes on present and expected economic and financial conditions. The survey covers around 1,200 Swiss households and results are synthesised into a single summary consumer climate index that attempts to measure consumer sentiment.

The pattern in consumer attitudes and spending is often a major influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Consumer spending accounts for a major portion of the Swiss economy, so investors want to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. An increasing important element of the survey is the question concerning current buying intentions.