The KOF's leading indicator was essentially stable in October. At 95.8, the latest reading was down just a tick on September's unrevised reading and on the firm side of the market consensus. That said, it was still more than 4 points short of its long-run average.

Sentiment worsened slightly in the goods producing sector and foreign demand was also a little weaker. However, finance and insurance as well as hospitality posted modest gains.

Today's update leaves intact the broadly flat trend seen in the index since June and so continues to point to sub-par economic growth over the coming months. Still, it also lifted the Swiss RPI to minus 4 and the RPI-P to 15, the latter showing that real economic activity, for so much of 2023 undershooting market expectations, is now running a little hotter than forecast.

The headline index is expected to lose further ground in October, sliding from 95.9 to 95.0.

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.