A survey published on 2 May 2022 shows a marked weakening of consumer sentiment in April in Switzerland. Consumers’ outlook for the general economic situation has turned far more pessimistic, said Switzerland’s State Secretariat of Economic Affairs (SECO).
In April 2022, the consumer sentiment index plunged to -27, well below the long-term average of −5, marking the biggest decline since the onset of the pandemic in the spring of 2020.
Swiss households are particularly pessimistic about how the economic situation will develop over the next 12 months, with the corresponding sub-index dropping to −31, well below the long-term average of around -5. For the first time in more than a year, respondents are again expecting weak economic activity, albeit not to an extent comparable with spring 2020 when the index dipped to below -75. However, while the latest level of the expected economic development index is not as low as spring 2020, the drop of nearly 80 points since the third quarter of 2021 is greater than the 75 point drop that occurred in spring 2020.
With inflation dampening households’ purchasing power the sub-index for expected price development (122 points) has risen sharply since January’s survey.
In addition, the sub-index on how people expect their financial situation to change over the next 12 months has fallen to -25, slightly more negative than in spring 2020 (-23). This, combined with heightened uncertainty driven by the war in Ukraine, is likely to be a major driver in consumers’ current reluctance to make major purchases, something reflected in the corresponding sub-index, which dropped from -23 to −31 points between January and April 2022.
However, while households are feeling the strain of continuing prices increase the situation in the labour market is positive. Consumers’ expectations for the labour market remain better than average. There was a marked improvement since January in the sub-index on perceptions of job security, which is now well above the long-term average. Furthermore, unemployment figures are expected to continue to develop favourably over the next 12 months.
The consumer sentiment survey is done every January, April, July and October. A total of 1,210 people aged 16 and over took part in the last survey.