Zurich/Basel, 25 February 2015 – In January, seasonally adjusted new car registrations were down 20% compared to the previous month, more than wiping out the rise in December. This trend was expected since higher carbon taxes apply from January 2015 when purchasing a car. For this reason, many new car purchases were brought forward to the old year, causing registrations in the new year to slump.

The retail sector showed budding optimism at the start of the year. In January, the index assessing business conditions rose to 11 from –6 points. However, 94% of retailers submitted their assessment before the Swiss National Bank (SNB) abandoned the exchange rate floor on January 15. The subsequent appreciation of the Swiss franc is likely to have had a significant negative impact on retailers' views, given the expected rise in shopping tourism and the weak phase for the economy.

The rise to –6 points from –11 in the consumer sentiment index, which is compiled by the State Secretariat for Economic Affairs, must likewise be viewed with some skepticism. In this case too, three quarters of the respondents delivered their assessment prior to abandonment of the exchange rate floor. The one quarter who responded after January 15 showed considerably more pessimism (–17 points) than the three quarters who provided their views at an earlier stage (–3 points). Private consumption is therefore likely to be weaker at present than a first glance at these survey results would suggest.

Sources: Seco, UBS

How the UBS Consumption Indicator is calculated
The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of about three months on the official figures. At roughly 60%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from five consumer-related parameters: new car registrations, business activity in the retail sector, the number of domestic overnight hotel stays by Swiss residents, the consumer sentiment index, and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index, all of this data is available monthly.

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