In the third quarter of 2019, Swiss GDP growth accelerated to +0.4% q/q after +0.3% q/q in the previous quarter. While private consumption (+0.2%) and investment in construction (+0.2%) registered only modest growth, the momentum around public consumption (+0.5%) and investment in equipment (+0.7%) proved more dynamic. However the main driver behind the solid Q3 performance was exports. While overall the Swiss export sector clearly is not immune to ongoing headwinds from the slowdown in global momentum and elevated trade uncertainty, some sectors that are less sensitive to the business cycle – including chemical and pharmaceutical products as well as energy exports – recorded remarkable growth rates and helped prop up the Swiss industry. However, the Q3 GDP release is likely a case of “as good as it gets”. Going forward this rate of GDP expansion is hardly sustainable as external headwinds will persist in 2020 while domestic demand – and in particular the consumer – are showing increasing signs of fatigue.
