Swiss economy hits the brakes
Switzerland's economic outlook has worsened in almost all sectors, according to a survey carried out by the KOF Swiss Economic Institute.
The only sectors displaying a positive trend in KOF’s latest survey are construction, consumer-oriented services and insurance.
Official authorities have reported that the tourism and industrial sectors, both dependent on exports, are suffering the most. The strength of the Swiss franc and the weakening of the global economy have hurt competitiveness, making firms “more pessimistic about future trends,” the KOF survey says. The institute polled more than 7,000 companies in the country.
Swiss retailers are also downbeat, a feeling that is “presumably attributable to shopping tourism” in neighbouring countries. A slowdown in the economy is expected to deal a fresh blow to consumer confidence.
The latest publications by research institute BAK Basel and the Meat Traders Association show that the lost revenue in recent months in the highly volatile retail sector is likely to run into billions.
KOF says, “it is not possible to provide a precise estimate of the sales revenue that Swiss retailers are losing as a result of shopping tourism”, but points out that businesses in bordering German towns, for example, are booming. The cantons of Geneva, Tessin and Thurgau, all bordering EU countries, feel their business situation to be worse than the national average.
All in all, the state of the Swiss economy is likely to deteriorate by next summer, with all indicators pointing downward. The slowdown of economic growth, which started in the third quarter, is set to continue in the first quarter of 2012, although the KOF report states that “a recession is not likely to develop within the next few months.”
As a result, companies are putting their recruitment plans on hold or are considering laying staff off in the coming months, the report says.