The Swiss retail sector enjoyed a boom over the summer. Real-time indicators now suggest that this upturn is coming to an end. The slowdown began when case numbers started to rise again and even before the Federal Council announced new tighter restrictions in October. This once again indicates that the impact of the public’s personal perceptions on purchasing behaviour is just as significant as the restrictions imposed.

In contrast to the retail sector, there was no summer boom in industry. Order intake has been falling since summer 2018. Coronavirus has exacerbated the situation significantly. The mechanical engineering, electronics and metal industries have lost around 30 percent of their order volume over the past two years. There is currently no indication of a sustainable upturn any time soon. The investment climate remains bleak.

Growth, sentiment and trend

In percent

The US performed strongly in the third quarter, with high GDP growth of 7.4 percent compared to the previous quarter. Year-on-year economic output is still around 3 percent down on the previous year’s figure, although the US has less ground to make up to return to the pre-crisis level than almost all European countries. The US retail sector figures were also surprisingly strong, with high annual growth of 5.4 percent in September.

Despite political unrest and persistently high case numbers, US economic performance has been remarkably robust so far. Signs of underlying problems are nevertheless provided by consumer sentiment surveys, which fell still further in November from an already low level. Employment market statistics indicate that the number of workers in the low-wage sector still stands at 20 percent below the pre-crisis level – this situation presents potential for tension.

Growth, sentiment and trend

In percent

France and Italy, which both suffered a huge decline in economic output in the second quarter, mounted an equally impressive recovery in the third. The gap to the pre-crisis level stands at around –4 percent and is similar to that of Germany, which was hit much less severely by the pandemic. The situation is currently much more challenging in Spain and the UK, where the gap stands at almost 10 percent. Spain suffered from the absence of tourists and the UK from a long, ongoing strict lockdown and uncertainty over Brexit.

Case numbers are currently rising sharply almost everywhere in Europe, and new, stringent lockdown measures are being imposed. As a result, widespread negative quarterly growth is again anticipated in the fourth quarter.

Growth, sentiment and trend

In percent

The East Asian countries are currently the only states in the world achieving economic output above pre-crisis levels. China performed strongest in the third quarter, with annual growth of 4.9 percent, followed by Taiwan and Vietnam. In South Korea and Malaysia, annual growth is just slightly into negative territory. Unlike Europe and the US, coronavirus case numbers have been low and stable in the East Asian countries, which means they have been able to refrain from a further lockdown. This makes the region a global beacon of hope.

In contrast, the Latin American countries are a long way off a return to normal, even though case numbers are currently stabilizing there. In these countries, GDP is once again 8 percent and more below the previous year’s figure in the third quarter.

Growth, sentiment and trend

In percent