The KOF's leading indicator was weaker than expected in March. From a downwardly revised 98.9 in February, the headline index dropped 0.7 points to 98.2, unwinding around half of the previous month's advance. This was its first decline since last November and means that the indicator has not been above its long-run average since April 2022.

March's drop reflected modest setbacks in manufacturing, services and construction partially offset by stronger exports. Other categories were broadly unchanged. Within manufacturing, it was a mixed picture with a negative assessment of employment and inventories contrasting with a more optimistic view of new orders and intermediate goods. The labour market continues to pose problems for recruitment.

Today's update suggests that real GDP growth should be close to its historic norm near-term but also reduces the Swiss ECDI to minus 7 and the ECDI-P to minus 20. Both readings show that overall economic activity is slightly lagging market expectations.

KOF's leading indicator is expected to hold steady at 99.9 in March. This index in February, up a better-than-expected 3.8 points, matched its 100.0 long-run average.

The KOF Economic Indicator is a composite leading indicator that aims to identify shifts in the Swiss business cycle around three months ahead of the actual event and, until the start of 2014, was based on twenty-five different economic indicators. The old version of the KOF Economic Indicator used the previous year's GDP growth rate published by the Swiss State Secretariat for Economic Affairs (SECO) as a yardstick. The revised measure still incorporates SECO data; however, KOF has changed over to month-on-month changes in GDP which are generated via statistical methods. This reference series is not about exact GDP figures but about the direction and strength of the economic trend. The new objective of the Barometer is the same as the old objective: achieving maximum possible accuracy in predicting the Swiss business cycle.

The indicator measures overall economic activity through a qualitative business survey about developments in the recent past, the current situation and expectations for the next three to six months. Getting an accurate handle on where the economy is headed is inevitably a vital element in all investment decisions and the new measure uses some 219 variables in order to do just that. The set of variables will be reviewed every autumn.

Survey questions relate to production, orders and stocks of finished goods. The KOF Swiss Economic Institute publishes this indicator monthly.