Analysts Less Optimistic About the Swiss Economy

Context

In brief

• September index: +2,6 points, 9,5 lower than August.
• 23,1% see an improvement over the next six months.
• 56,4% expect an unchanged situation.
• UBS and CFA Society Switzerland: 78 analysts.

Key facts

• Indicator → +2,6 points
• Comparison with August → decrease of 9,5 points
• Sample → 78 analysts
• Survey dates → 17 and 24 September
• Horizon → next six months
• Calculation → 23,1% minus 20,5% = +2,6 points
• Partner through 2023 → Credit Suisse
• Current partner → UBS

In September, the index on the prospects for the Swiss economy stood at +2,6 points, down 9,5 points from August. The figure is still positive, but financial analysts' optimism about the evolution of the Swiss business cycle has declined.

The indicator is calculated by UBS and CFA Society Switzerland based on a survey of experts. The launch is attributed to Keystone-ATS; the acronym ATS is given in the news reference. The survey was conducted on 17 and 24 September, with the participation of 78 analysts from the Swiss financial community.

The balance between confidence and caution

23,1% of respondents expect an improvement in economic conditions over the next six months. 20,5% instead expect a deterioration, while 56,4% expect no changes. These three shares make up the main index: 23,1% minus 20,5% gives +2,6 points.

Comparison with August shows a less favorable movement. Optimists decreased by 7,2 points; pessimists increased by 2,3 points and the group expecting the status quo grew by 4,9 points. The largest share therefore remains that of those expecting stability, while the overall balance remains in positive territory.

By construction, the balance compares those expecting an improvement with those expecting a deterioration. Those indicating stability neither increase nor reduce the arithmetic value, but explain why a positive index can coexist with a majority oriented toward the status quo.

The survey has been conducted since January 2017. Until 2023, CFA's partner was Credit Suisse. CFA is described in the source as an association of investment professionals with American roots; the partner is now UBS, the bank that acquired the competitor. September's result thus captures expectations that are still positive, but less broad than in the previous month.

Operational details

Prices, Rates, and Markets

The picture becomes more nuanced when looking at inflation, interest rates, the SMI, exchange rates, and unemployment. For those who live or work in Switzerland, the practical value lies in comparing expected trends, without turning the survey into a personal figure to apply to one’s own budget.

Expected Trends

Regarding inflation, 48.7% of the sample expects inflation in Switzerland to rise, 5.1% expects it to fall, and 46.2% expects it to remain stable. This distribution indicates which scenario is most widely held among analysts but does not assign a numerical value to inflation. The data should therefore be interpreted as an indication of trends, not as a measure of price changes for an individual household.

Regarding interest rates, stability prevails in the short term at 61.3%, while 36% expect a rise. In the long term, the largest group—48%—sees no changes, while 41.3% expect an increase. Stability remains the leading forecast for both time horizons, but the expectation of a rise retains a significant presence in the responses.

The stock market also sends a clear signal. 53.5% of respondents expect the SMI index to rise over the next six months, an increase of 4.0 percentage points compared to August. 31% anticipate stable levels, and 15.5% expect a decline. This indication pertains to the SMI and does not automatically correspond to the general assessment of the economic situation.

Exchange Rates and Employment

Regarding the franc against the euro, 44.6% expect it to strengthen, 18.9% expect it to weaken, and 36.5% expect no change. Against the dollar, the percentages are 44.6%, 18.9%, and 29.7%, in that order. The difference therefore lies primarily in the proportion of those expecting stability. For a practical comparison between the franc and the euro, the comparatore CHF/EUR can be used.

Regarding unemployment, 38.7% expect the number of unemployed to rise, 58.7% expect it to remain stable, and 2.7% expect it to fall. Again, these are analysts’ expectations, not individual counts. To complement the inflation signal with a reading from costo della vita in Svizzera, it is advisable to keep aggregate data separate from your actual expenses.

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Key points

How to Use the Data in a Practical Way

The survey results can be used as a framework for interpretation, provided you keep three key points in mind: the survey date, the time horizon, and the projected direction. Following a simple procedure helps avoid confusing an aggregate expectation with an outcome that has already been observed.

Four Practical Steps

1. Define the time frame: note September 17 and 24, the survey dates, along with the 78 responses from the Swiss financial community. The sample defines who is expressing the expectation.

2. Separate the time horizons: use the next six months for the economic outlook and the SMI; for interest rate expectations, distinguish between the short and long term. Do not treat different time intervals as equivalent.

3. Record the direction for each item: improvement, deterioration, or stability for the economic outlook; increase, decrease, or stability for inflation, the stock market, exchange rates, and unemployment. The categories retain their original meanings.

4. Keep the euro and the dollar separate: for the franc, note the three percentages relative to the euro and then those relative to the dollar. For operational comparison, use comparatore CHF/EUR.

The next step is to examine the largest group together with the minority shares. A predominance of stability does not negate the portion of the sample that sees an increase, a decline, or a contraction. Similarly, a majority on one indicator does not automatically describe the others.

For those who live or work in Switzerland, this grid serves to connect separate signals without attributing to the survey a level of precision it does not possess: the source provides expected percentages, not an individual amount, a personal rate, or an employment outcome. Noting the comparison with August, when available, allows you to distinguish the indicator’s level from its monthly change.

To move from a general overview to a check of your own income and taxes, use calcolatore stipendio/imposte.

Source: swissinfo.ch