KOF employment indicator in positive territory despite decline
- 05 Feb 2024 8:20 am CET
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According to the KOF Swiss Economic Institute, employment prospects in Switzerland will remain good in the coming months, but a slight decline can be observed. This is the result of poorer prospects in the hospitality, retail and manufacturing sectors.
The employment indicator calculated by the KOF Swiss Economic Institute fell for the fourth time in a row in the first quarter, but remains clearly in positive territory, as the KOF reported on Monday. For the first quarter of 2024, it still stands at 7.5 points, following the slightly upwardly revised 8.0 points of the previous quarter.
This means it is still well above the long-term average of 1.5 points, as the KOF economists emphasize. However, since mid-2022, when the indicator value reached an all-time high (16.5 points), the value has been falling slightly.
The employment indicator is calculated from the KOF's quarterly economic surveys. According to the press release, the evaluations for the first quarter are based on the responses of around 4,500 companies that were surveyed in January about their employment plans and expectations.
Major differences between sectors
On balance, the majority of participating companies still consider the current number of employees to be too low. According to the KOF, the proportion of companies planning to increase the number of employees in the next three months also outweighs the proportion of those planning to cut jobs.
As the KOF Employment Indicator has in the past shown a lead over the overall economic development of employment and gainful employment, the indicator therefore points to a continued positive development of employment in Switzerland for the current and coming quarter.
However, there are also a few sectors with poorer prospects: In the manufacturing sector, for example, a majority of companies consider the current number of employees to be too high. These companies are planning to reduce employment in the coming months. Overall, the KOF Employment Indicator in manufacturing has been in negative territory for a year now.
The KOF Employment Indicator is also down on the previous quarter in the retail trade, hospitality and insurance sectors. However, the indicator value in these three sectors is still in positive territory - the number of companies in these sectors that expect to increase employment is therefore predominant on balance.
In the other sectors, the KOF Employment Indicator remained fairly stable or even rose slightly, according to the press release.