Economy – KOF Business Tendency Surveys: Significant improvement in business conditions and growing confidence in the Swiss economy – KOF

Firms' business forecasts for the coming six months are also more confident again. On balance, the outlook is more positive than it has been since the beginning of the year. The Swiss economy is regaining its footing.

The more encouraging business activity in October particularly reflected developments in the manufacturing sector. 

Following the sharp setback in August, the business situation here has eased significantly. In addition, project engineering firms are reporting an improvement in their business. 

The retail trade as well as the financial and insurance services sectors are also seeing a slight upturn in business activity. 

The situation in the hospitality industry, the wholesale trade and other services remains virtually unchanged. The construction industry, on the other hand, suffered a slight setback in October. Overall, this situation is good news for the Swiss economy, particularly because business in the manufacturing sector is easing. This reduces the risk of the economy as a whole falling into a downward spiral.

Business forecasts for the coming six months are more confident in some sectors than they have been since at least the spring of this year. This applies to the construction industry, the retail trade, the wholesale trade, financial and insurance services, and other services. Confidence is also growing in other sectors of the economy – especially in manufacturing but also in project engineering and the retail trade. Only the hospitality industry is somewhat more cautious in its outlook.

Price and wage expectations remain stable at a moderate level
Companies' sales price projections suggest that inflation will remain moderate. 

Firms in the business-related services sector are most likely to report raising their prices slightly more frequently than before. When asked not about their own prices but about their forecasts for the consumer price index over the next twelve months, companies anticipate an average inflation rate of 1.0 per cent (July: 1.1 per cent). Medium-term inflation forecasts also remain stable, with firms expecting an inflation rate of 1.9 per cent in five years' time (July: 1.8 per cent).

Consequently, businesses' expectations regarding wage levels in their own organisations have not changed since the summer. Companies expect gross wages to rise by 1.3 per cent on average over the next year, as they did in July. Wage growth is likely to be below average in the manufacturing, retail and wholesale sectors, while above-average wage increases are expected in the construction and project engineering sectors and in the hospitality industry.

The results of the KOF Business Tendency Surveys for October 2025 include responses from around 4,500 firms in the manufacturing, construction and major service sectors. This equates to a response rate of around 56 per cent.