Swiss households financial situation continues to dampen consumer sentiment - SECO

According to the report from State Secretariat for Economic Affairs (SECO), consumer sentiment in Switzerland remains slightly below average. Low expectations regarding consumers’ own budgets are clouding the outlook. However, respondents are cautiously optimistic about the future general economic situation. The labour market has still been assessed positively but prospects have deteriorated somewhat.

Swiss consumer sentiment remains subdued. At −8 points, the consumer sentiment index in July 2019 stood slightly below its long term average (−5 points). The assessment has hardly improved in comparison with April’s survey (−9 points).

The subdued sentiment is due in particular to households’ budget situation, with both the past (−13 points) and anticipated financial situation (−8 points) being assessed as well below average (average −6 points and +2 points respectively). Therefore, the likelihood of consumers making major purchases has, unsurprisingly, also remained below average (−11 points; average: −6 points). Based on these survey results, only restrained development of private consumer expenditure is to be expected.

By contrast, respondents have a mildly optimistic view of the future development of the general economic situation. At 0 points, the relevant sub-index exceeds its average (−9 points) but remains considerably lower than in 2017 and 2018, when the economy was growing dynamically. This sub-index’s current level thus points to moderate economic growth.