Swiss Gross domestic product in the 2nd quarter: Industry on the fast track

The Swiss economy once again recorded dynamic growth in the 2nd quarter of 2018. GDP (+0.7%) expanded at an above-average rate for the fifth quarter in a row. This expansion was largely supported by manufacturing, which has been experiencing a remarkable upturn since spring of 2017. Exports of goods increased accordingly.

Switzerland’s GDP grew by 0.7% in the 2nd quarter of 2018, after 1.0% (revised) in the previous quarter,* marking over a year of rapid economic expansion. Similarly strong growth rates over several quarters were last reached in 2014. Thus, the Swiss economy grows again at a faster pace than the Euro area, despite somewhat weakening momentum in the 2nd quarter.

Manufacturing provided the most substantial boost to growth in the 2nd quarter (+1.5%). The sector continued its unbroken positive development over the previous quarters, underpinned by robust foreign demand and the favourable exchange rate movements compared to recent years. Thanks to marked growth in energy production from hydropower and nuclear power plants, the energy sector also recorded an extremely positive quarterly result (+4.8 %). Accordingly, exports of industrial products and energy rose sharply. Total exports of goods** increased at an above-average rate again after two weak quarters (+2.6 %). So far, the international trade dispute has had hardly any impact.

The service sector displays a little more heterogeneous picture than at the beginning of the year. Accommodation and food services (+1.4%) grew rapidly following a rise in the number of overnight stays of guests from Switzerland and abroad. The sector’s value added climbed to its highest level since 2011. The financial sector also continued its recovery. Both the sector’s value added and exports of financial services picked up moderately once more. Additionally, the entertainment sector (+10.1%) provided a sharp boost to growth.*** However, some domestically oriented service sectors lost a degree of momentum, including the health sector (+0.5 %) and business-related services (+0.3 %). Finally, trade (-0.2 %) suffered a drop in value added, triggered in particular by sluggish growth in wholesale.

In keeping with the slowdown in various production sectors with domestic focus, domestic final demand ran out of steam somewhat. Only growth in investment in construction (+0.8%) accelerated noticeably. Private consumption (+0.3 %) expanded at a slightly below-average rate, hindered in particular by low energy consumption because of weather conditions. Investment in equipment (-0.3%) consolidated at a high level following multiple quarters of above-average growth. This was accompanied by a fall in imports of goods** and services (-0.7 %).

2018 revision of national accounts

As every year, in summer 2018 the Swiss Federal Statistical Office published its first results on the Annual National Accounts for 2017 and the revised results for the two years prior to that. It also revised the historical time series of other key economic statistics. SECO has integrated these adjustments into the Quarterly National Accounts and, where necessary, modified the calculation method. More information is available in the technical note “The 2018 revision of the Swiss Quarterly National Accounts” at www.seco.admin.ch/gdp

Notes

* Percentage changes on the previous quarter of chained series, price, seasonal and calendar adjusted national accounts aggregates in accordance with ESA 2010.

** Excluding non-monetary gold and valuables.

*** Value added in this sector is subject to major fluctuations as a result of international sports events. See also the technical note “Adjusting Swiss GDP for the impact of major international sporting events” at http://www.seco.admin.ch/gdp under “Auxiliaries”.