The leading economic indicator lost a little ground in March but still held above its 100 historic norm for a third straight month. At 101.5 the latest reading was down from February's upwardly revised 102.0 and slightly short of the market consensus.

The monthly drop was mainly attributable to weaker conditions in construction and household consumption. However, finance and insurance posted more positive signals while manufacturing was broadly flat.

The March update leaves overall economic activity lagging slightly behind market expectations the Swiss RPI (minus 4) and RPI-P (minus 10) are both sub-zero - but still points to above average growth over coming months.

The headline index is seen at 102.0, up from 101.6 in February.

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.