Consumer Sentiment Declines – Retail Sales Rise

While retail sales in Switzerland increased by 5.7 percent in September compared to the previous month, the consumer sentiment index has dropped by a staggering 47 points since July 2022, reaching its lowest level since the survey began in 1972.

(Bern) According to the October survey, consumer sentiment has further deteriorated compared to the previous quarter. The assessment of their own financial situation has fallen to a new historical low. The propensity for major purchases remains significantly below average. However, the labor market situation continues to be viewed very positively. The consumer sentiment index (−47 points) has again declined compared to the survey from July, reaching its lowest level since the survey began in 1972.

On the one hand, consumer expectations for the general economic development over the next twelve months have further worsened. The corresponding sub-index now stands at −57 points, well below the long-term average (−9 points). On the other hand, households assess their financial situation even more negatively than in the previous quarter. The sub-index for past financial situation (−40 points) has fallen to a historically low value. Only in the early 1990s was the situation rated similarly poorly. The sub-index for expected financial situation (−47 points) has also dropped to a new low.

The negative assessment of their own financial situation is likely significantly influenced by the price developments. The sub-index for past price development (131 points) has continued to rise. In contrast, the sub-index for expected price development (105 points) has slightly decreased again, but it remains at a very high level. Accordingly, respondents continue to be cautious about major purchases; the corresponding sub-index stood at −42 points, significantly below the historical average.

Confidence in the State of the Labor Market

However, respondents still believe in a good state of the labor market: Job security (−26 points) is rated as practically unchanged and good. Expectations for the development of unemployment figures have somewhat worsened compared to July, but the corresponding sub-index (39 points) is still significantly below the long-term average.

Seasonally Adjusted Retail Sales Grew by 1 Percent

The seasonally adjusted retail sales, adjusted for sales and holiday effects, increased nominally by 5.7% in September 2022 compared to the same month last year. Seasonally adjusted, nominal retail sales grew by 1.0% compared to the previous month. This is shown by the provisional results of the Federal Statistical Office (BFS).

The real retail sales, adjusted for sales and holiday effects, increased by 3.2% in September 2022 compared to the previous year. The real development takes inflation into account. Compared to the previous month, real retail sales increased seasonally adjusted by 0.9%.

Retail Without Gas Stations

Adjusted for sales and holiday effects, retail without gas stations recorded a nominal sales growth of 5.1% in September 2022 compared to September 2021 (real +2.9%). The retail sector for food, beverages, and tobacco recorded an increase in nominal sales of 2.8% (real 0.0%), while the non-food sector registered a nominal increase of 6.8% (real +5.0%).

Seasonally adjusted, retail without gas stations recorded a nominal sales growth of 1.0% in September compared to the previous month (real +0.9%). The retail sector for food, beverages, and tobacco saw a nominal sales increase of 0.1% (real 0.0%). The non-food sector registered a nominal increase of 1.4% (real +1.3%).

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