A Swiss leading economic indicator dropped further into negative territory in July, according to the Swiss Institute for Business Cycle Research (KOF). It forecast on Friday that the economic slowdown would last at least until the end of this year.
KOF, which is part of the Swiss Federal Institute of Technology in Zurich, said its indicator fell to a reading of -0.21 from a downwardly revised -0.07 in June.
The institute said that new industrial orders showed a slight rise in July, after registering their first decline for two years in June. In a statement, it noted less pessimism about future spending on intermediary goods.
However, KOF said these two positive factors had only a limited impact on the indicator, which was mainly affected by the combination of lower orders and increased production.
It added that surveys showed households judge their financial situation in the coming 12 months as less good than in previous quarterly surveys, while wholesalers judge their stocks too high.
Economists at UBS Warburg said that any negative reading of the leading indicator suggested that the Swiss economy was growing below potential output.
swissinfo with agencies