The headline index was a good deal stronger than expected at quarter-end. At 105.5, the September reading was 2.5 points above the market consensus and up from a significantly higher revised 105.0 in August. This was its second highest print since October 2021 and more than 5 points firmer than its 100 long-run average.

Moreover, the monthly gain reflected broad-based advances amongst the major components, notably in manufacturing and financial services. Domestic demand continues to expand but its overseas counterpart lost ground.

In sum, the September report points to a decidedly better outlook for economic growth than was the case in August and, if correct, could mean that the SNB has eased policy for the last time this year. It also lifts the Swiss RPI to 18 and the RPI-P to 29. Economic activity in general is running quite well ahead of market forecasts.

The headline index is seen edging up from 101.6 in August to 102.0.

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.