UBS says Swiss economy will pick up in third quarter

Switzerland's largest bank UBS on Tuesday forecast that Swiss industry would pick up slightly in the third quarter, following a dull spell which had been more pronounced than expected.

Switzerland’s largest bank UBS on Tuesday forecast that Swiss industry would pick up slightly in the third quarter, following a dull spell which had been more pronounced than expected.

In its quarterly survey of 300 industrial firms, UBS said economic growth in the second quarter slowed down to 0.6 percent. The bank forecast that GDP growth would climb to 0.9 percent in the third quarter.

With regard to many of the industrial indicators, companies taking part in the survey reported more negative news than the previous year, particularly in incoming orders, production and work in hand.

UBS said that the optimistic expectations expressed in its March survey were therefore not fulfilled.

It said that the slight improvement in the third quarter would come from foreign orders and exports, which should both be higher than last year’s levels.

But forecasts remained gloomy for the domestic market, with companies expecting a further reduction in Swiss orders.

The firms questioned said they expected a moderate improvement in sales, with the result that stocks of finished products could be reduced slightly.

The survey showed that the constant pressure on prices was continuing to harm profit prospects as one company in six said it expected a worsening of its earnings position.

The firms also said they would reduce staff further in the period from July to September.