The economic barometer increased to 98.0 in September from a downwardly revised 96.2 (97.4) in August, but remains below its long-term average.

Among manufacturers and financial services, the outlook improved, but US tariffs are likely weighing on sentiment, with demand-side industries showing weakness within foreign demand.

Within the production components for manufacturing and construction, participants are reporting positive developments generally for their businesses and also, surprisingly, for exports within the sector. That could be reflecting a shift away from the US towards Europe and China.

Nevertheless, despite the improved sentiment, the outlook for the Swiss economy is subdued. This was also the determination of the Swiss National Bank in its monetary policy evaluation earlier this month, which specifically said US tariffs are contributing to uncertainty in the economy. The SNB is forecasting growth between 1.0 to 1.5 percent this year and slowing to 1.0 percent next year.

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.