Weakening in Consumer Confidence

Bern, 08.08.2012 - The consumer confidence survey conducted for the State Secretariat for Economic Affairs (SECO) showed a slight deterioration between April and July. The index, calculated on the basis of a quarterly survey*, reached -17 points in July 2012 (compared with -8 in April). This fall in consumer confidence is attributable to the more pessimistic expectations with regard to future economic development, together with an anticipated more pronounced rise in unemployment.

Of the four sub-indices which are included in the calculation of the consumer confidence index**, two showed a significant deterioration between April and July 2012. This relates to the assessment regarding the development of the overall economic situation over the next 12 months (-20 points in July, compared with -2 in April) as well as to consumer expectations concerning unemployment (+62 points in July compared with +49 in April). By contrast, the assessment of the future development of consumers’ personal financial situations over the next 12 months persisted around the same level as the April figures (-3 points in July com-pared with 0 in April). The same applies to the assessment by consumers of their future sav-ings opportunities (+15 points in July compared with +20 in April).

Other sub-indices in the survey which are not included for the purpose of calculating the overall index, showed a deterioration in some areas compared with April. In particular, there was a pessimistic assessment of the general economic situation over the last twelve months (-24 points in July compared with -18 in April) and consumers were also less favourable in their assessment of job security (-72 points in July compared with -64 in April). By contrast there was virtually no change in the attitude towards the timing of larger purchases (-2 points compared with +1 in April), the assessment of consumers’ own current savings opportunities (+40 points compared with +41 in April) nor in the assessment of the past personal financial situation (-12 points in July compared with -9 points in April).

Consumers changed their assessment of inflation over the last 12 months which they saw as being lower than in April (+22 points in July compared with +32 in April). Expectations of in-flation over the next 12 months remained however at a similar level to those in April (+32 points in July compared with +34 in April). Consumer expectations of inflation and their as-sessment of past inflation remain at a very low level in Switzerland, as they have been since the beginning of 2009.

Between July and April there was also a slight deterioration in the “old” consumer confidence index, as had been calculated prior to October 2009 (-13 points in July compared with -9 in April).

Amendment to the survey design
From April 2012 the consumer confidence survey will be conducted with some amendments. The aim of these was to guarantee a more accurate representative sample of the Swiss pop-ulation used for the survey. The following four amendments are intended to improve the sur-vey's representativeness:

Whilst the consumer confidence survey previously only covered the German and French speaking regions of Switzerland, the Tessin region (the Italian speaking part) will now also be included.
The number of interviews was increased from 1’100 to approx. 1’200.
The random sampling will now be conducted within the framework set by the Swiss Federal Statistical Office (FSO) “Framework for Random Sampling for Individuals and Households Surveys (SRPH)***“.
Individuals whose landline phone details are not available have the option of answer-ing the questions online or by using a free phone number.

In addition, a different market research institute is in charge of the surveys for the SECO****. The survey period was extended from 2 to 3 weeks.

Despite changes in the survey design and the review of the scope of the sampling, the inter-pretation of the consumer confidence index is fundamentally not called into question. For control purposes duplicated surveys based on old and new methodologies were conducted for the April and July 2012 surveys. There were no significant differences identified during this test phase. Consequently, conducting the survey in future using the new design will not restrict the continuity nor the temporal comparability of the results.

*In the months of January, April, July and October, about 1’200 households are surveyed on behalf of SECO regarding their subjective assessment of the economic situation, their personal financial situation, inflation, job security etc.

**Two additional questions were included in the survey in October 2009. One is a question regarding unem-ployment expectations and another is a question about the probability of households being able to save in the future. The new questions help in calculating a new, official, more EU compatible consumer confidence index for Switzerland. The three new quarterly series begin in April 2007 (see technical notes “Extension of survey" dated 4 November 2009 at: http://www.seco.admin.ch/themen/00374/00453/index.html?lang=en.

***For further information: http://www.bfs.admin.ch/bfs/portal/de/index/news/00/08.html.

****The market research institute DemoScope (http://www.demoscope.ch/) will now be conducting the surveys on behalf of the SECO.

Address for enquiries

State Secretariat for Economic Affairs SECO
Holzikofenweg 36
CH-3003 Bern
Tel. +41 58 462 56 56
medien@seco.admin.ch