Swiss consumer confidence worsens: prices and jobs

Context

TL;DR

• In September, the SECO index fell to -35,8 points
• The figure fell by 3,0 points compared with August
• Job security fell to -60,6
• This is the first decrease in the indicator since last March

Key facts

• Overall indicator in September → -35,8 points
• Overall indicator in August → -32,8 points
• Expected economic development → from -36,4 to -42,5
• Financial situation in past months → from -38,8 to -42,3
• Job security → from -54,3 to -60,6
• Expected prices over the next twelve months → from 113,3 to 115,6
• Average 2023-2026 → -37,3

In September, the Swiss consumer confidence index stood at -35,8 points. Based on the survey by the State Secretariat for Economic Affairs (SECO), the figure fell by 3,0 points from the -32,8 recorded in August, marking the first decline since last March. Compared with the previous year, the decrease reached 0,7 points, while the index remains slightly above the 2023-2026 average, set at -37,3. The deterioration is accompanied by more pronounced pessimism about the personal situation, the perception of high prices, and concerns about job security.

The components of confidence

The decline affects several components. Expectations for the country's economic performance fell from -36,4 to -42,5, well below the multi-year average of -34,3. The assessment of the personal financial situation also worsened: the figure for the months just past fell from -38,8 to -42,3, while that for the coming months fell from -29,6 to -31,0. As for major purchases, the time continues to be considered unfavorable, with the sub-index falling from -26,3 to -27,3.

The item concerning job security fell from -54,3 to -60,6, remaining the clearest signal. The figure remains well below the average for the last three years, at -34,7.

Prices and index construction

Prices also enter the picture. The sub-index for past developments rises from 122,5 to 129,3; that for expectations over the next twelve months from 113,3 to 115,6. For the next five years, the figure falls from 109,2 to 105,8, while remaining very high. The scale produces positive balances when the majority of consumers perceive a price increase.

The survey has been conducted since 1972: in the past it was quarterly, whereas recently it has been monthly. To ensure fair regional representation, the Ticino sample is deliberately larger and participants are asked fourteen questions. The response options range from much better (+2) to markedly worse (-2), including better, no change, and worse. Each question yields a sub-index; the overall climate corresponds to the average of four indicators: economic situation in the coming months, financial situation in the past months and the coming months, favorable time for major purchases.

Operational details

The September figure should be read by separating the aspects measured by the survey. The -35,8 is not the change in a single expense: it summarizes four sub-indices used for the overall climate and is accompanied by other signals on prices and job security. For people living in Switzerland, this distinction makes it possible to turn the national figure into a concrete question about their own budget, without confusing a collective perception with a personal figure.

Prices: past, next year, long term

The three price readings do not describe the same phase. The value relating to the past rises from 122,5 to 129,3: the balance is more positive in the assessment of price increases already perceived. The one for the next twelve months rises from 113,3 to 115,6. The series for the next five years, however, falls from 109,2 to 105,8, while remaining at very high levels.

The sequence suggests more pronounced pressure between the past and the short term, with easing only over the long term. This is not a precise forecast of how much a single item will cost, but an interpretation of the responses collected by SECO. For this reason, anyone monitoring their own costo della vita in Svizzera must keep the increases already perceived separate from expectations for the next twelve months and from those for the next five years.

Finances and employment should be read separately

The two items on personal financial situation worsen together: the sub-index for the months that have passed goes from -38,8 to -42,3, while that for future months goes from -29,6 to -31,0. The double decline signals that pessimism concerns both what has just happened and immediate expectations. The parameter for major purchases, from -26,3 to -27,3, adds an indication that the period is considered unfavorable for spending substantial amounts.

Job security requires separate consideration. The value of -60,6 is much lower than the average for the past three years, which was -34,7, but it does not indicate how many people will lose their jobs. It records the assessment expressed in the survey. The same caution applies to the overall index: it describes consumer confidence, but does not replace an individual assessment of income or expenses.

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Key points

The survey can become a practical framework for interpreting one’s decisions, provided that the periods and categories indicated by SECO are kept separate. Balances should not be converted into personal percentages: they are used to compare the direction of responses from one month to the next.

Four steps for using the data

1. Set the comparison period. Start with the September data and place it alongside the August data, also noting the year-on-year change when available. This prevents the monthly movement from being confused with the movement observed compared with the previous year.

Examine separately the four indicators that make up the overall climate: economic prospects, the recent situation of personal finances, the situation expected in the short term, and the advisability of making major purchases. For each one, separate the data relating to the past, short-term forecasts and spending intentions.

3. Keep job security on a separate line. The relevant subindex is presented by SECO together with the other indicators, but it is not included among the four values used to calculate the average of the overall climate. Comparing it with the average of the last three years helps prevent this signal from being confused with the one concerning personal finances.

4. Read prices across three time horizons: past developments, the next twelve months and the next five years. Remember that the scale produces positive balances when the majority perceives a price increase. Comparisons with one’s own expenses and with a possible major purchase should be made while keeping the three time frames separate.

Since the survey has recently been conducted monthly, the comparison sheet can be updated month by month. If the main topic is work, the annunci di lavoro can be consulted. To turn monitoring available resources into an estimate of one’s monthly margin, use calcolatore stipendio.

Source: tio.ch