CH: Merchandise Trade Balance

Tue Jan 30 01:00:00 CST 2018

Actual Previous Revised
Trade Balance level CHf2.63B CHf2.63B CHf2.58B

The black ink on merchandise trade was CHF2.63 billion in December following a marginally smaller revised CHF2.58 billion in November.

Exports were up 10.8 percent on the year within which volumes gained 4.6 percent, just a tick short of their November rate. Imports advanced 13.5 percent with real purchases 11.1 percent higher. Seasonally adjusted, monthly growth of nominal exports was 4.9 percent and of volumes 2.8 percent. The comparable import figures were minus 0.4 percent and 0.6 percent respectively.

The December data mean that exports in calendar 2017 rose 4.7 percent to a new record high. Faster global growth and, over the second half of the year, a weaker CHF will have been instrumental in this. However, imports also picked up, increasing 6.9 percent for their strongest performance since 2010 and reflecting the strengthening momentum of the Swiss domestic economy. The full year surplus was CHF34.8 billion, a CHF2.1 billion dip versus the 2016 outturn but no doubt still easily large enough to ensure that the CHF remains Europe's preferred safe haven currency during periods of investor uncertainty.

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.