Swiss consumer spending falls: report

Swiss consumer spending and sentiment dropped in July after reaching a six-year high in the previous month, UBS said in a report issued on Wednesday.

Swiss consumer spending falls: report
Vehicle registrations rose but other consumer spending indicators dropped. Photo: AFP

The bank’s consumption indicator sank from 2.07 to 1.66 points, with only a rise in new vehicle sales bucking the trend, the report said.

The indicator is calculated from figures on car registrations, retail sales, domestic overnight hotel stays by Swiss residents, UBS credit card transactions and consumer sentiment.

A 26 percent rise in new vehicle registrations in July over the previous month marked the first time since 2012 that registrations have increased, UBS said.

Consumer sentiment recorded by the State Secretariat for Economic Affairs (Seco) was slightly weaker last month at minus one, down from plus one point, the bank said.

However, it remains well above the long-term average of minus nine.

The bank said consumer sentiment is influenced by two opposing factors.

One the one hand, “most households anticipate their future economic and financial situation to be worse,” it said.

“On the other, as more consumers assume an improvement to the labour market, along with higher prices, they consider the present time favorable for larger purchases, including cars.”

The registration of new vehicles last month was the highest for July since 2000.

Private consumption accounts for about 60 percent of Switzerland’s Gross Domestic Product, a measure of the country’s economy.

UBS said its consumption indicator signals private consumption trends in Switzerland with a lead time of about three months on official figures.

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