Economic growth expected to slow in first half

The latest survey from the Swiss Institute for Business Cycle Research (KOF) shows strong fourth-quarter growth, but the pace is expected to slacken in the first half of 2001.

“The Swiss economy still continues on a clearly expansionary path but the tempo should slow in the course of 2001,” the KOF said on Thursday.

The survey of about 5,000 companies in January showed that its indicator for overall industrial activity continued at the same high levels seen for roughly the past nine months.

The indicator has not been so high since 1990.

“This indicator has a very high correlation to the annual growth rate of gross domestic product (GDP), so the fourth-quarter GDP rose also very strongly,” the KOF said.

The results also showed that in the month of December growth remained strong.

The survey indicated that a high level of investment in equipment offset larger bottlenecks, and that over half of the companies surveyed – 60 per cent – expected steady demand, while a further 25 per cent expected higher demand.

It also said the continued strong demand meant its capacity utilisation measure rose slightly to 84.4 per cent in the fourth quarter, adding that this brought the level into line with the average measured from 1980 to 1999.

Growth was expected to come increasingly from the domestic economy, as opposed to the export sector. But although the outlook for exports was no longer “as euphoric as it was a year ago order inflows are still expected to rise”.

swissinfo with agencies