The KOF's leading indicator was again weaker than expected in April. From an upwardly revised 99.2 in March, the headline index dropped 2.8 points to 96.4, some 1.6 points short of the market consensus. This was its steepest fall since May last year and its weakest reading since last December. It also means that the indicator has still not been above its long-run average since April 2022.

The latest setback reflected losses in manufacturing, where weak orders were an issue, services, and private consumption. By contrast, the outlook for foreign demand was broadly stable while financial services posted a modest improvement.

Today's update points to below par GDP growth over the coming months. It also leaves both the Swiss ECDI (minus 36) and ECDI-P (minus 30) deep in negative surprise territory. The SNB is still expected to raise interest rates again in June but on current trends a smaller 25 basis point increase is beginning to look more likely than another 50 basis points hike as seen in March.

KOF's leading indicator is expected to dip 0.2 points in April to 98.0. This index in March, down 0.7 points to 98.2, remained below its 100 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.