Switzerland's leading indicator fell sharply in March - KOF

According to the report from KOF Economic Research Agency, the reading of the KOF Economic Barometer dropped drastically in March. Accordingly, the Swiss economy can be expected to see a marked decline in growth rates in the near future. This plunge of the Barometer reflects the first economic consequences of the accelerated spread of the Coronavirus.

The KOF Economic Barometer fell by 8.9 points in March, from 101.8 (revised from 100.9) down to 92.9. Economists had expected a drop to 81.6 from 101.8 in February. The Barometer plunged from its long-​term average about as low as after the minimum exchange rate for the Swiss franc was abandoned in January 2015. Its troughs at the time of the economic crisis in 2008/9 were still significantly lower, but a large part of the survey responses underlying the Barometer were received in the first half of March, i.e. before the measures taken by the Federal Council on 16 March severely restricted economic activity in Switzerland.

None of the indicator bundles feeding into in the barometer were able to counteract this slump of the barometer, which has so far been largely driven by the manufacturing sector. The weakest negative impulses are stemming from the export related indicators.

The downturn in sentiment in the goods producing sectors (manufacturing and construction), which is reflected by the barometer, included all branches without exception, the textile and metal industries most of all, and the food industry least of all. It was largely driven by the assessment of orders and production.