— Alexander Koch, Raiffeisen Schweiz
The Swiss Economic Institute reported on Tuesday that its KOF Economic Barometer dropped unexpectedly in May. A composite indicator that provides a reading on the GDP growth direction for the Swiss economy came in at 101.6 in the reported month, down from April's upwardly revised 106.3 points. Meanwhile, market analysts anticipated a slight decrease to 106.2 in May. Nevertheless, the Barometer remained well above its long-term average, suggesting that the economy held the ace for further growth. The manufacturing sector contributed the most to the following decrease, with the paper, metal and electronic industries posting the largest losses. The weak sentiment in the sector was shown in lower volumes of new orders and competitiveness. However, the indicators for inventories pointed to a positive trend. Apart from the manufacturing sector, negative contributions were also made by the financial industry, exports, domestic consumption and the construction sector. Despite the disappointing release, the Swiss Frank managed to refrain from it.
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