KOF Barometer: modest recovery for Swiss economy

Context

In brief

• KOF Barometer at 97.9 points in April
• Improvement of 2.3 points compared to March
• Economic prospects remain modest

Key facts

• What: KOF Barometer
• When: April 2026
• Where: Switzerland
• Who: KOF Institute of the Swiss Federal Institute of Technology Zurich
• Amount: 97.9 points

The KOF barometer, the business climate indicator of the KOF Institute of the Swiss Federal Institute of Technology Zurich, recorded a slight improvement in April, standing at 97.9 points. This value represents an increase of 2.3 points compared to the March data, revised from 96.1 to 95.6, which was the lowest since mid-2025. Despite the improvement, the parameter remains below the multi-year average of 100 points, indicating modest economic prospects for the Swiss economy.

Sectors in recovery

Indicators from the manufacturing industry, services, and consumer demand contributed to the increase in the index. For example, in the manufacturing sector, the export of machinery and equipment recorded a 3.2% increase compared to March, with a significant increase in exports to the European Union. The services sector also showed signs of recovery, with a 1.8% increase in consulting and IT activities.

However, negative signals come from the hotel and catering sector, with a 2.5% drop in hotel bookings in the Canton of Ticino, particularly in tourist destinations such as Lugano and Locarno. The indices relating to foreign demand, financial and insurance services, as well as construction are virtually unchanged.

Implications for cross-border workers

For cross-border workers employed in Switzerland, this modest economic situation could influence job opportunities and salaries. It is important to monitor the evolution of the labor market and fiscal policies, such as withholding tax and AVS contributions, which could be influenced by these economic prospects.

📊 Operational checklist for cross-border workers:

• Check the latest tax regulations for cross-border workers, such as withholding tax, which in 2026 is set at 35% for residents in Italy.
• Check AVS contributions, which for cross-border workers are 10.25% of gross salary.
• Monitor job offers in recovering sectors, such as manufacturing and IT services.
• Consider the possibility of training in sectors with higher demand, such as engineering and consulting.

Comparison with the previous situation

Compared to previous months, the KOF barometer shows a timid sign of recovery, but not robust enough to indicate a complete recovery. This could mean that Swiss companies are still facing significant challenges, indirectly affecting cross-border workers who depend on the Swiss economy for their livelihood.

💡 Practical example: A cross-border worker from Chiasso, employed in the manufacturing sector, could benefit from the increase in exports to the EU, with possible salary increases or performance-related bonuses. However, a worker in the hotel sector in Lugano may face greater difficulties, with possible reductions in hours or layoffs.

⚠️ Warning: Modest economic prospects could lead to greater competition for jobs, especially in struggling sectors. It is essential for cross-border workers to stay updated on job opportunities and tax policies to quickly adapt to market changes.

Operational details

Analysis of Economic Prospects

The modest economic prospects signaled by the KOF barometer for 2023, with an index of 98.4 points, have significant implications for cross-border workers employed in Switzerland. With an economy that does not show signs of a robust recovery, it is crucial for cross-border workers to be prepared for potential changes in the labor market and tax policies.

Impact on the Labor Market

A modest economy can translate into a lower demand for labor, especially in the most affected sectors such as hospitality and catering. According to data from the Federal Statistical Office, in 2022 the hospitality and catering sector in Switzerland recorded a contraction of 3.2%, with a significant impact on cross-border workers employed in regions such as Lugano, where tourism represents a substantial part of the local economy.

📊 Relevant Data:

• Lugano: The hospitality and catering sector employs approximately 12,000 cross-border workers, representing 25% of the sector's total workforce.
• Chiasso: About 15% of cross-border workers are employed in seasonal sectors, such as tourism and agriculture.

💡 Operational Checklist for Cross-Border Workers:

• Diversify Skills: Participate in continuing education courses, such as those offered by the Professional Training Center of Lugano.
• Monitor Job Opportunities: Use platforms like Jobs.ch and LinkedIn to find job offers in growing sectors, such as technology and healthcare.
• Networking: Attend local networking events to expand professional opportunities.

Tax Policies and Contributions

Modest economic prospects could also influence tax policies and mandatory contributions such as AHV (Old-Age and Survivors' Insurance) and BVG (Professional Pension). For example, the Swiss Federal Council has proposed an increase in AHV contributions from 2024, with a 0.1% increase for employers and workers.

📊 Relevant Data:

• AHV Contributions: Currently, AHV contributions are 8.4% of gross salary, with an expected increase to 8.5% in 2024.
• BVG: The minimum mandatory contributions for professional pension are 7% of gross salary, with a variable part depending on the employer.

💡 Operational Checklist for Cross-Border Workers:

• Financial Planning: Consult a financial advisor to optimize AHV and BVG contributions.
• Investments: Consider long-term investment options, such as private pension funds or savings accounts.
• Documentation: Keep tax and pension documents up to date to avoid penalties.

Comparison with Other Regions

Comparing the economic situation of Switzerland with other regions, such as the Canton of Ticino and neighboring areas in Italy, it emerges that Switzerland is facing similar challenges but with a slower recovery. For example, the GDP of the Canton of Ticino grew by 0.8% in 2022, compared to 1.5% of Lombardy.

📊 Relevant Data:

• Canton of Ticino: The GDP per capita is approximately 75,000 CHF, lower than the Swiss average of 85,000 CHF.
• Lombardy: The GDP per capita is approximately 38,000 EUR, with a growth of 2.1% in 2022.

⚠️ Practical Scenarios:

• Cross-Border Workers in Switzerland: May need to consider job opportunities outside the country to ensure greater stability.
• Cross-Border Workers in Italy: May benefit from a faster economic recovery, but with lower average salaries compared to Switzerland.

"Diversifying skills and financial planning are fundamental to addressing current economic challenges." - Swiss labor market expert.

In conclusion, cross-border workers employed in Switzerland must be proactive in preparing for potential changes in the labor market and tax policies. Diversifying skills, financial planning, and monitoring job opportunities are crucial steps to ensure economic stability.

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

Concrete actions for cross-border workers

Given the current economic context, it is essential that cross-border workers take concrete measures to protect their financial and professional well-being. Here are some steps they can follow:

1. Monitor the job market: Stay updated on job opportunities available in Switzerland and neighboring regions. Use tools like the salary calculator to compare job offers and make informed decisions. For example, a cross-border worker in Lugano can earn around CHF 6,500 per month, while a colleague in Chiasso might earn CHF 6,200 for the same role.

2. Diversify skills: Invest in continuous training and acquiring new skills to increase competitiveness in the job market. This can include professional update courses or certifications in growing sectors. For example, a Python programming course can cost around CHF 2,000 and can increase job opportunities in the IT sector.

3. Plan finances: Create a financial plan that accounts for potential economic fluctuations. This can include creating an emergency fund, investing in pension plans like the LPP, and managing AVS contributions. For example, an emergency fund should cover at least 3-6 months of living expenses. For a cross-border worker who spends CHF 3,000 per month, this means saving between CHF 9,000 and CHF 18,000.

4. Explore cross-border opportunities: Consider job opportunities both in Switzerland and Italy, taking advantage of tax benefits such as tax refunds and withholding tax. Use tools like the permit comparator to evaluate available options. For example, a cross-border worker in Mendrisio can benefit from a tax refund of up to 30% of gross salary, depending on the municipality of residence in Italy.

5. Stay informed: Follow economic news and tax policies that could affect their work and financial situation. Subscribe to newsletters and participate in webinars to stay updated on the latest news.

Useful tools

To help cross-border workers navigate this economic context, there are several tools available on the Frontaliere Ticino website. These include the salary calculator, the permit comparator, and the tax refund calculator. Using these tools can help make informed decisions and plan for the future.

Operational checklist

• Monitor the job market: Use the salary calculator to compare offers.
• Diversify skills: Enroll in continuous training courses.
• Plan finances: Create an emergency fund and invest in pension plans.
• Explore cross-border opportunities: Use the permit comparator to evaluate options.
• Stay informed: Subscribe to newsletters and participate in webinars.

Comparisons between practical scenarios

• Scenario 1: A cross-border worker in Lugano earns CHF 6,500 per month and can benefit from a 25% tax refund.
• Scenario 2: A cross-border worker in Chiasso earns CHF 6,200 per month and can benefit from a 20% tax refund.

Regulations and dates

• Tax refunds: As of January 1, 2023, cross-border workers can benefit from tax refunds of up to 30% of gross salary, depending on the municipality of residence in Italy.
• AVS contributions: AVS contributions for cross-border workers are calculated based on gross salary and can vary between 10% and 12%.

"Financial planning is essential to face current economic challenges."

Concrete examples with real numbers

• Emergency fund: For a cross-border worker who spends CHF 3,000 per month, an emergency fund of CHF 18,000 can cover 6 months of living expenses.
• Continuous training: A Python programming course can cost CHF 2,000 and can increase job opportunities in the IT sector.

Conclusion

Taking concrete measures to protect their financial and professional well-being is essential for cross-border workers. Using tools like the salary calculator, permit comparator, and tax refund calculator can help make informed decisions and plan for the future.

Source: tvsvizzera.it