A leading indicator of the trends in Switzerland’s economy plummeted in March, signalling a sharp decline in growth rates ahead, as economic activity was severely hit by the spread of the coronavirus, or Covid-19.
The Economic Barometer dropped to a four-month low of 92.9 from 101.8 in February, which was revised from 100.9, survey data from the KOF Swiss Economic Institute showed. The reading is well below its long-term average. “Accordingly, the Swiss economy can be expected to see a marked decline in growth rates in the near future,” the think tank said. “This plunge of the Barometer reflects the first economic consequences of the accelerated spread of the Coronavirus.”
The latest fall was the worst since the Swiss National Bank abandoned the ceiling of the minimum exchange rate for the Swiss franc 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,” KOF said. The slump is thus far led by the manufacturing sector with the weakest negative impulses coming from the export related indicators. Sentiment deteriorated sharply in all branches of manufacturing and construction 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, the group noted.