The leading indicator topped 100 for the first time since March, gaining to 101.1 in July, a noticeable improvement from June's revised 96.3, the lowest reading of the year. Manufacturing and hospitality were the primary positive influences, with all subsectors of the former reporting positive developments.

The report noted that insurance services and foreign demand were negative. Switzerland is still waiting to announce a trade deal with the US, and that could be weighing on sentiment.

The Women's Soccer World Cup which was held in Switzerland in July, could have helped with the more positive result, particularly for the hospitality industry.

Today's result is a welcome development after the dismal reading in June and perhaps sets the stage for a stronger third quarter.

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.