Swiss economy at its peak despite geopolitical risks

With regard to the short-term development, however, companies are more reserved than in previous months.

The KOF Business Situation Indicator for companies in Switzerland rose in April and reached its highest value since the recovery from the financial crisis in 2010/2011. With regard to the short-term development, however, companies are more reserved than in previous months. For the Swiss economy, the positive effects of the recovery following the COVID-19 pandemic have so far outweighed the constraints linked to the war in Ukraine.

End of the obstacles linked to the pandemic – relaxation in the hotel and catering industry

The marked improvement in the business situation in April is due to a marked easing in the hotel and catering sector and in the economic sector of other services. These sectors of the economy are clearly benefiting from the lifting of the obstacles linked to the pandemic. The wholesale trade is also in an upward phase. In addition, the business situation in financial and insurance services is partly recovering following a sharp downward correction in March. In the other surveyed economic sectors, changes in the business situation were relatively small in April. The business situation indicator fell slightly in construction and in the project sector, and a little more markedly in retail trade and manufacturing industry.

Upward pressure on prices, now also in catering

When it comes to selling prices, companies are still planning to raise them across the board. The upward pressure on prices therefore continues and has even increased in certain sectors. Especially in the area of ​​other services and catering, where the upward trend in prices has so far been rather moderate, companies are now planning to increase prices.

Inputs remain scarce – War in Ukraine aggravates shortage

For the production sectors of manufacturing and construction, the shortage of materials and intermediate products remains a marked problem. The shortage worsened from last summer. In January, more than half of responding manufacturing firms reported a shortage of intermediate products. In April, the problem got even slightly worse. Currently, 57% of companies feel concerned. The shortage is particularly marked in the construction of machines and vehicles as well as among manufacturers of data processing equipment, electrical and optical equipment. In the construction sector, problems with materials seemed rather to ease at the start of the year: 37% of companies reported these problems in January, compared to 48% last July. But the subject is once once more becoming much more pressing: in April, 51% of construction companies complained of disruptions in production due to a lack of materials. Furthermore, the wholesale sector indicates that an easing of delivery times for goods is not to be expected in the near future. The theme of the shortage of materials and intermediate products should therefore remain on the agenda given the war in Ukraine and the outbreaks of COVID-19 in Asia.

The results of the current KOF business tendency surveys from April 2022 incorporate the responses of more than 4,500 companies from industry, construction and the main service sectors. This corresponds to a response rate of approximately 57%.