CH: Merchandise Trade Balance

Thu Jun 21 01:00:00 CDT 2018

Actual Previous Revised
Trade Balance level CHf2.76B CHf2.29B CHf2.25B

The trade surplus weighed in at an unadjusted CHF2.76 billion in May following a slightly smaller revised CHF2.25 billion in April. Seasonally adjusted, the black ink stood at CHF2.25 billion, down from CHF2.72 billion last time.

The deterioration in the adjusted data reflected a 0.9 percent monthly rise in exports that was more than offset by a 3.8 percent jump in imports. The real trade balance also worsened as export volumes were only flat while imports climbed 3.1 percent.

The May report leaves a slowly rising trend in exports while imports, despite last month's spurt, are little more than flat. Even so, real trade flows so far point to a negative contribution from net exports to second quarter GDP growth.

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.