Analysts wait for news on economy

Analysts are keenly awaiting data this week which will indicate how well Switzerland is bearing up in the face of the economic slowdown in the United States and increasing signs that Europe's powerhouse, Germany, is struggling to maintain growth.

Thursday sees the release of figures for first quarter Gross Domestic Product. The GDP rate for the last three months of 2000 was 2.5 per cent and most analysts expect this week’s data to confirm a slight slowdown in the economy.

Two economic surveys released last week also suggested that growth had slackened. Basel Economics said it expected GDP for the year as a whole to be around 2.2 per cent, while the Institute for Business Cycle Research puts the figure at 2.0 per cent.

Friday sees the release of the latest unemployment figures, which are expected to remain stable at around 1.7 per cent. Switzerland has enjoyed near full employment for some months now and commentators say there’s little scope for the rate to fall further.

Indeed, many sectors such as finance, telecommunications and technology now have a lack of qualified staff that is hindering their growth prospects.

Another indication of economic performance and consumer confidence will be Thursday’s release of annual results from the luxury goods group, Richemont.

The luxury goods industry is one of the first to suffer as people tighten their belts during a slowdown so analysts will be eager to see how Richemont has fared.

Shares in the company have risen lately amid increased confidence that the US will escape a full-blown recession and that the economy will remain on its upward climb.

The manufacturer of electronic components, LEM, comes through with its first quarter figures on Thursday as well. This is another industry that has been hard hit by the economic slowdown in the US and the company will be hoping for better times ahead.

by Michael Hollingdale