Economy Swiss GDP grew slightly in the third quarter

The Swiss economy grew only slightly in the third quarter of 2024. Industry in particular weakened.

In the period from July to September 2024, real gross domestic product (GDP) increased by 0.2% on an adjusted basis compared to the previous quarter. This is below-average growth, the State Secretariat for Economic Affairs (Seco) announced on Friday. In the two previous quarters, growth was 0.4 and 0.1 percent respectively, although both figures were revised slightly downwards.

The latest GDP figure does not come as a complete surprise: Seco had already measured a figure of 0.2 percent two weeks ago in an initial quick estimate, which was the same as the figure now officially reported.

The figure is adjusted for sporting events. It is well known that the Olympic Games and major football events distort Swiss GDP due to the licensing income received by the sports associations based in Switzerland. On an unadjusted basis, GDP growth was slightly stronger at 0.4 percent. However, as on an adjusted basis, this is also slightly less than in the second quarter (+0.6%).

Strong trade...

According to Seco, growth in the third quarter was supported by parts of the services sector, construction and consumption. By contrast, exports of goods and value added in the manufacturing sector, i.e. in traditional industry, declined.

Specifically, the greatest impetus for growth came from trade (+1.4%), which, according to Seco, expanded considerably after four weak quarters. Retail trade in particular (+1.0%) grew strongly and, in line with this, private consumption (+0.5%) was also slightly above average. Consumers spent more on food, housing, energy and health in particular, according to the report.

Government consumption (+0.5%) and construction investment (+0.9%) also increased. According to Seco, there was a corresponding increase in value added in the construction industry (+0.8%). The fact that domestic final demand (+0.2%) nevertheless grew only modestly overall can be explained by a further broad decline in equipment investment (-1.3%). For example, less was invested in machinery, vehicles and IT. Imports (-0.4%) of goods and services fell slightly accordingly.

Developments in the other service sectors were mixed. Positive impetus came from the healthcare and social services sector (+0.5%) and public administration (+0.5%), among others. On the other hand, value added in the hospitality industry (-1.0%) fell, which according to Seco was reflected in a decline in overnight stays in the hotel industry, for example.

...weak industry

The industrial sector can look back on a negative quarter. Value added in the energy sector (+8.2%) rose sharply due to exceptionally high electricity production from hydroelectric power plants, writes Seco. In the manufacturing industry (-1.1%), however, it fell significantly.

The chemical and pharmaceutical industry (+0.2%) expanded only slightly after strong growth in the previous quarter; the other industrial sectors even recorded significant declines. This was reflected in a sharp decline in exports of goods (-4.1%). Overall, foreign trade also made a negative contribution to GDP growth.

SDA