CH: Merchandise Trade Balance

Thu Dec 21 01:00:00 CST 2017

Actual Previous Revised
Trade Balance level CHf2.63B CHf2.33B CHf2.45B

The merchandise trade balance was CHF2.63 billion in the black in November, up from CHF2.45 billion in October but CHF0.7 billion below its level a year ago.

Both sides of the balance sheet saw significantly faster rates of expansion. Hence, annual growth of exports climbed from October's 6.3 percent to 9.5 percent while imports jumped from 7.8 percent to 16.4 percent. Volumes followed a similar pattern with the export rate up from 3.1 percent to 4.4 percent and the import rate 7.7 percentage points higher at 6.8 percent.

Seasonally adjusted, nominal exports were 1.5 percent firmer on the month (real 0.8 percent) while imports advanced 2.1 percent (2.3 percent).

The November data leave intact a slowly deteriorating trend in the surplus. Exports seem to be responding to the slide in the value of the CHF but a strengthening domestic economy has boosted the demand for imports.

The merchandise trade balance measures the difference between the total value of Swiss merchandise exports and imports. The focus is on the balance of trade in goods, excluding precious metals, gemstones, works of art and antiques. This is provided in unadjusted and workday adjusted measures for cash and volume. Seasonally adjusted monthly changes are also available for total exports and imports.

Changes in the level of imports and exports along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the Swiss franc in the foreign exchange market. Switzerland's major trading partners include Germany, France, Italy and the United States. While Switzerland still exports large amounts of traditional products such as chocolate and watches, more than half of Swiss exports are in mechanical and electrical engineering and chemicals today. A positive trade balance indicates a trade surplus while a negative balance represents a trade deficit. Trade surpluses indicate that foreigners are buying more Swiss goods, which are typically paid for in Swiss Francs. This translates into greater demand for the currency and upward pressure on the value of the Franc. However, if the balance is a deficit, Swiss consumers are buying goods from trading partners which translates into higher demand for foreign currencies placing downward pressure on the value of the Franc.