Swiss GDP in the 3rd quarter: Economic growth abruptly interrupted

Switzerland’s GDP fell by 0.2 % in the 3rd quarter of 2018 due to both the industrial and service sectors. On the expenditure side, domestic demand and foreign trade had a negative impact.

Switzerland’s GDP fell by 0.2 % in the 3rd quarter of 2018, after climbing by 0.7% in the previous quarter.* The strong, continuous growth phase enjoyed by the Swiss economy for one and a half years was suddenly interrupted. Switzerland is thus following the significant economic downturn seen at the same time in other European countries, particularly Germany.

Both the industrial and service sectors contributed to the negative quarterly result. Value added in manufacturing dipped slightly (−0.6 %); however, in the context of the particularly dynamic growth of the past few quarters, this amounts to a normalisation at a high level. In the energy sector too, value added decreased after two extremely positive previous quarters (−2.2  %), with the dry summer resulting in production downtime at hydropower plants. In line with the fall in production in these sectors, exports of industrial goods and energy decreased sharply. Total exports of goods** (−4.2 %) also contracted substantially. At least, October’s foreign trade figures are already indicating a swift recovery.

The quarterly result for the service sector was hardly better. Value added in trade (−1.0 %) declined significantly following an already negative previous quarter, driven down by both retail and wholesale. The financial sector also recorded a minor drop, with the steady expansion lasting for several quarters being interrupted. Both value added (−1.1 %) and exports of financial services decreased. In contrast, the positive development of the previous quarters persisted in the business services (+0.7 %) and health sectors (+0.5 %). The sluggish growth in services reflects, on the one hand, the generally subdued foreign demand for Swiss services. On the other hand, the weak domestic economy in the course of the subdued consumption climate in Switzerland also affected the 3rd quarter.

Private households barely increased their consumption expenditures (+0.1 %) in the 3rd quarter, showing little willingness to make major purchases in light of weak real wage development. General government consumption (−0.1 %) decreased slightly, while investment in construction (+0.02%) almost flatlined. Investment in equipment (−2.0 %) fell sharply in almost all categories – only investment in machineries was slightly higher than in the previous quarter. In line with the decline in domestic demand, imports** of goods and services (−1.6 %) also slackened considerably.


* 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.