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CH: KOF Swiss Leading Indicator
| Actual | Previous | Revised | |
| Index | 102.5 | 103.4 | 103.6 |
Highlights
After posting a string of gains since December, the economic barometer pulled back in January, waning to 102.5 from 103.6 in December, as the hospitality and construction sectors weighed on the overall result. Despite the pullback, the measure is above its intermediate-term average.
The outlook was positive but mixed for manufacturing, financial services, and insurance according to respondents to the survey.
Within manufacturing, job prospects are more pessimistic while order books and exports are facing headwinds. The strength of the Swiss franc is likely having an impact on both new businesses coming in and the overall export situation.
Despite some pessimism within sectors, the index has remained above 100 for four consecutive months, suggesting a tentative foothold for the economy.
Definition
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.
Description
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.