Switzerland GDP returned to moderate growth in the 4th quarter of 2018

According to the report from Federal Statistical Office, Switzerland’s GDP rose by 0.2% in the 4th quarter of 2018.  As in other European countries, this confirms a slowdown of the economy compared to the first half of the year. After a weak 3rd quarter (revised GDP growth: −0.3%), the economy at least returned to a moderate growth path.

This was largely due to manufacturing (+1.5%). Following a breather in the 3rd quarter, the sector returned to dynamic growth, especially in the chemical and pharmaceutical segment. However, other industries also reported turnover increases, such as the watchmaking and precision instrument industry as well as the food industry. Manufacturing benefited from the strong international demand for Swiss products: exports of goods (+5.6%) grew substantially.

Development in the service industry varied in the 4th quarter. In healthcare (+0.9%) and in business-related services (+0,4%) value added grew once again. Meanwhile trade (−0.6%) recorded its third negative quarterly figure in a row. The negative development of the previous quarter also continued in the financial sector (−0.8%). Overall, the development of the service sector remained below the historical average, curbed by declining exports of services (−2.6 %) and a final domestic demand which remains sluggish (−0.0%).

After a very weak previous quarter, the consumption expenditures of private households (+0.3%) saw a moderate rise, mainly due to health spending. Investment in construction (−0.4%), however, dipped slightly, particularly as a result of decreasing activity in building construction. Reflecting the weak domestic demand, imports of goods and services (−0.5%) fell slightly.

The provisional real GDP growth rate for 2018 is 2.5%. With this result, the Swiss economy has achieved growth comparable to that of 2014 (2.4%) for the first time again.