Tuesday, the UBS said its monthly consumption indicator for Switzerland rose to 0.99 in March from a revised 0.89 in February, indicating that the downtrend seen in private consumption halted for the time being. However, the indicator is still below its long-term average of 1.50.
The UBS said the prospects for private consumption are becoming increasingly gloomier due to an expected acceleration in the number of unemployed in the course of economic slowdown.
However, on a more positive note, falling inflation, especially with regard to energy sources, is likely to bolster purchasing power and hence consumer spending. Following a 1.7% real increase in consumer spending last year, the UBS forecasts a more modest increase of 0.4% for 2009.
UBS calculates the leading indicator from five consumer related parameters- new car sales, the business situation in the retail trade, the number of overnight hotel stays by Swiss nationals in Switzerland, the consumer sentiment index and credit card transactions made via UBS at points of sale in Switzerland.
The slight increase in the consumption indicator in March was due to a 0.8% annual rise in new car registrations.
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