KOF Employment Indicator rises for the first time in two years
Published: Monday, Aug 5th 2024, 10:00
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The employment outlook in Switzerland has brightened slightly. The outlook for employment in the manufacturing industry is slightly positive again, as the KOF Swiss Economic Institute at ETH Zurich writes in a forecast published on Monday.
The employment indicator calculated by the KOF rose slightly again in the third quarter of 2024 for the first time since mid-2022. It currently stands at 5.2 points, compared to 4.2 points in the second quarter of 2024 (revised from 3.4 points).
Since its all-time high in the second quarter of 2022, the indicator has fallen slightly each quarter, from 16.6 to 4.2 points in the second quarter of 2024, the KOF writes. Overall, however, the indicator is still above its long-term average.
This means that there are still more companies expecting to increase their workforce than those planning to reduce it. The indicator thus suggests that the normalization of the labour market will be accompanied by a soft landing following the exceptionally good situation in 2022 and 2023.
The employment indicator is calculated from the KOF's quarterly economic surveys. According to the press release, the evaluations for the third quarter are based on the responses of around 4,500 companies that were surveyed in July about their employment plans and expectations.
Positive manufacturing industry
According to the KOF, the outlook in the manufacturing industry has developed particularly positively compared to other sectors. In the previous quarter, a clear majority of companies in this sector considered their headcount to be too high and expected to cut jobs. This quarter, a slight majority of the companies surveyed are now planning to increase their workforce.
The KOF Employment Indicator also shows a slight increase in the banking sector compared to the previous quarter.
In contrast to this positive development, the KOF employment indicators in the retail and wholesale sectors have deteriorated. On balance, a majority of the companies surveyed in these sectors intend to reduce their headcount. The decline in the KOF Employment Indicator is also particularly marked in the hospitality industry.
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