| Actual | Previous | |
|---|---|---|
| Level | -37 | -42 |
Highlights
Consumer sentiment bounced back in May, rising to minus 37 from minus 42 in April, in large part due to a more optimistic outlook for economic expectations. Although still below its long-term average, the index measuring economic expectations rose to minus 43 in May from minus 67 the previous month.
Still, consumers are cautious. On whether it's currently a good time to make large purchases, the index was at minus 28 in both April and May, having fallen from minus 26 in March. They were slightly more positive on the outlook, which improved to minus 55 from minus 58.
The savings-to-debt component fell to 32 in May from 35 in April, matching the level of June of last year. This suggests consumers are dipping into savings or taking on debt to make purchases.
While there are some positive rumblings, there is no getting around the notion consumers are remaining cautious in the face of uncertainty. This is true not just of Switzerland, but other European countries as well.
Still, consumers are cautious. On whether it's currently a good time to make large purchases, the index was at minus 28 in both April and May, having fallen from minus 26 in March. They were slightly more positive on the outlook, which improved to minus 55 from minus 58.
The savings-to-debt component fell to 32 in May from 35 in April, matching the level of June of last year. This suggests consumers are dipping into savings or taking on debt to make purchases.
While there are some positive rumblings, there is no getting around the notion consumers are remaining cautious in the face of uncertainty. This is true not just of Switzerland, but other European countries as well.
Definition
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.
Description
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.
