The UBS consumption indicator stood at 1.38 points in July, suggesting that the third quarter started with a level of consumption growth that is slightly below the long-term average. This aligns with the forecasts of UBS Chief Investment Office Wealth Management, which forecasts that consumption in private households would grow by 1.3% in 2017.

The relatively weak level of employment growth in recent quarters remains a burden on consumption. In July, the consumption indicator was also negatively influenced by new car registrations, which fell by 4.6% year-on-year. With only 24,885 new registrations for the month, car sales were lower than at any other month since 2009. The weaker figures from the car market were offset by the number of overnight hotel stays by Swiss nationals. The 1.41 million overnight stays recorded in July represent an increase of 9.4% from the previous year, and also set a new record for the month.

The fall in the value of the Swiss franc in recent months is expected to lead to higher inflation, potentially limiting the purchasing power of households. On the other hand, the devaluation enhances the competitiveness of retail trade and tourism in Switzerland relative to neighboring countries. On the whole, the weaker franc could have a slightly positive effect on Swiss consumption growth.