Swiss Gross domestic product in the third quarter of 2020: still 2 % below pre-crisis level

Switzerland’s GDP grew by 7.2 % in the 3rd quarter of 2020,* after decreasing by a total of 8.6 % in the first half of the year. Domestic demand and parts of the service sector recovered significantly, while international developments had an adverse impact on exports.

In the 3rd quarter, Switzerland’s GDP grew vigorously, making up around three quarters of the ground lost in the first half of the year. GDP therefore still stands at some 2 % below the pre-crisis level at the end of 2019. Compared with neighbouring countries, the Swiss economy has made it through the coronavirus crisis relatively unscathed so far.

Following the gradual easing of the coronavirus measures, private consumption (+11. 9%) recovered significantly in the 3rd quarter, as expected. Various consumer sectors that were unavailable or difficult to access during the lockdown came back on stream. Investment in equipment (+8.8 %) and investment in construction (+5.1 %) also expanded considerably once more. As expected, final domestic demand registered record growth of 8.9%, still falling short of its pre-crisis level at the end of 2019 by around 2%. Imports of goods** (+11.2 %) and services (+9.9 %) grew substantially in line with this.

The strong recovery of domestic demand particularly benefited the parts of the service sector with a domestic focus. For example, value added in retail (+6,0%) rose sharply, partly supported by the relatively low numbers of Swiss people travelling abroad in the summer months, which also benefited wholesale as suppliers. In healthcare and social work (+12.0 %), too, value added climbed significantly, following the resumption of non-urgent treatments.

Clear upturns from the two negative previous quarters were experienced in arts, entertainment and recreation (+61.9 %) and accommodation and food services (+72.9 %). The opening of sports, leisure and cultural facilities and restaurants prompted a jump in value added. Nevertheless, these sectors’ figures came in well below pre-crisis levels. Firstly, certain health policy restrictions remained in place over the summer, such as those concerning major events, and secondly, many foreign tourists stayed away, hitting parts of accommodation and food services hard and contributing to the weak development of exports of services (+1.4 %).

Exports of goods** (+6.9 %) posted a stronger recovery from the negative previous quarter, also bolstering value added in manufacturing (+8.6 %). However, neither value added nor exports of goods came close to reaching the pre-crisis. The industrial sectors that are sensitive to the business cycle remain severely affected by the coronavirus crisis.

Notes
The coronavirus pandemic also has an impact on the production of statistics. As recommended by European statistical office Eurostat, the basic data and methods were subjected to an in-depth check for the current GDP calculation to avoid distorting effects due to the coronavirus pandemic.***  In particular, the latest information on advance notifications and applications for short-time working were taken into consideration, in addition to the existing data sources. Finally, all seasonal adjustment models were reviewed and amended as required.
Nevertheless, in view of the current data situation it is possible that in the coming quarters more significant revisions than usual will become necessary.

* Real percentage change compared to the previous quarter. Data and further information: http://www.seco.admin.ch/gdp
** Excluding valuables.
*** https://ec.europa.eu/eurostat/data/metadata/covid-19-support-for-statisticians.

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