Back to the 1970s: Confidence in the Swiss economy falls to 50-year low
In a warning sign for the wider economy, the latest Consumer Sentiment Index commissioned by the Swiss government has found that households are extremely pessimistic about the future. According to the survey, families and individuals in Switzerland have never been so unconfident about their own finances and the economy as a whole.
New index shows huge pessimism in the Swiss economy
The Consumer Sentiment Index by the State Secretariat for Economic Affairs (SECO) is a quarterly survey of the general population which is used to determine how confident consumers are about the wider Swiss economy and their own finances. 11 questions are asked regarding the respondent's financial situation, covering topics like savings and salaries, how they expect the price of goods and services to change, and how secure they feel in their job.
In October, the index continued to fall from a slightly positive outlook at the start of 2022 to minus 49 points today, the lowest the index has been since it was started in 1972. This is perhaps quite surprising, as the Swiss economy is currently fairing better than those in the rest of Europe, and other dates covered by the survey were arguably worse - 1974, for example, saw several nationwide car-free Sundays implemented because of an oil crisis, and GDP contracted by 7,5 percent between 1975 and 1976.
People in Switzerland worried about finances, not jobs
“Households have become even more pessimistic about their own financial situation than in the previous quarter,” SECO wrote. The government blamed rising prices for energy and other goods as the main driver behind the scepticism, with a majority saying they were putting off major purchases because of the uncertainty.
With health insurance costs and other prices set to rise significantly in 2023, SECO said it expects the current wave of pessimism to continue. "Consumers’ expectations on how the general economic situation is expected to develop over the next 12 months have become even gloomier,” the report concluded.
However, the index found that Swiss workers are more concerned about the economy than they are about losing their job. SECO noted that confidence around jobs has remained largely unchanged since the summer, and while fears of unemployment remain high, the current level of concern is lower than the long-term average.