Swiss economic outlook improves in July, driven by industry gains

Switzerland's economic prospects brightened in July, according to the KOF barometer from ETH Zurich. The indicator, which gauges short-term GDP trends, climbed 1.4 points to reach 103.5. This improvement signals a positive trajectory for the Swiss economy.

The research center noted enhanced outlooks in financial services and insurance, as well as in construction. The manufacturing sector also showed encouraging signs, with positive indicators for electrical engineering, automotive manufacturing, and mechanical engineering. However, demand from abroad and domestic consumption remained steady, showing no significant change.

This upward trend follows a sharp decline in the barometer in March, which was attributed to the economic shock of the Middle East conflict. Since then, the indicator has gradually recovered, surpassing the 100-point growth threshold in June. The July increase further solidifies the confirmation of improving economic conditions.

The Ministry of Economy is set to release its Q2 GDP estimate on August 14. In mid-June, the ministry had slightly lowered its 2026 GDP growth forecast to 0.9% from 1%, citing the "high uncertainty" climate due to the Middle East war. In the first quarter, Switzerland's GDP grew by 0.4%, boosted by industrial demand that offset a decline in pharmaceutical exports and stagnant consumer spending.