The headline index rose in mid-quarter but reversed only a portion of the previous period's 2.1 point decline. At 101.6, the August reading was a point above both its downwardly revised July print and the market consensus. It remains just above the 100 long-run average.

The monthly gain was mainly attributable to stronger performances by the consumer sector, construction industry and the other services sector. To a lesser extent, manufacturing and hospitality also contributed positively. Improvements here more than offset a modest deterioration in financial and insurance services. Foreign demand was broadly flat.

In sum, the August report again points to moderate growth of GDP over coming months. It also puts the Swiss RPI at minus 1 and the RPI-P at exactly zero meaning that economic activity in general is evolving in line with market forecasts.

The headline index is seen losing more ground in August, slipping from 101.0 to 100.6.

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.