A negative economic outlook weighed on consumer sentiment in March, with the overall index dropping to minus 35 in March, a marginal fall from the previous month. Compared to a year ago, consumer sentiment is still 3 points higher, but the trend in the economic outlook is cause for concern.

Consumers were nearly twice as negative on the economy this March than last, with the index falling to minus 43.6 from minus 22.6 a year ago. Perhaps taking this into account and the current situation, buyers viewed it as a good time to make a major purchase, with the component rising to minus 26.2 from minus 36.4 a year ago.

The past financial situation was judged more favorably, while the financial outlook worsened, it still remained above year ago levels.

The State Secretariat for Economic Affairs (SECO) compiles a quarterly survey of consumer attitudes on present and expected economic and financial conditions. The survey covers around 1,200 Swiss households and results are synthesised into a single summary consumer climate index that attempts to measure consumer sentiment.

The pattern in consumer attitudes and spending is often a major influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Consumer spending accounts for a major portion of the Swiss economy, so investors want to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. An increasing important element of the survey is the question concerning current buying intentions.