The leading economic indicator fell in May. At 100.3, the mid-quarter reading was down from April's marginally firmer revised 101.9 and nearly 2 points short of the market consensus. This is its weakest print since December and only just above the 100 long-run average.

The monthly slide was attributable to a smaller contribution from the manufacturing sector as well as weaker financial and insurance services. Foreign demand similarly slowed. However, there were gains in both private consumption and the construction industry.

Taken at face value, the May report points to moderate growth of GDP over coming months. Today's updates lift the Swiss RPI to 11 and the RPI-P to minus 8. Overall economic activity is running marginally ahead of forecasts but only due to upside surprises from inflation.

The headline index is expected to rise 0.4 points to 102.2.

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.