Following a lengthy period of declining values, the KOF Employment Indicator is pointing to a slight improvement in the employment outlook for the first time in three years.
The KOF Employment Indicator has risen to 0.7 points in the fourth quarter of 2025, recovering from its low of minus 0.6 points in the last quarter (revised from 0.3 points). A revision of the last quarter's figure on this scale is unusual. This is because the results of the KOF Business Tendency Surveys for August and September, which were received at a later date, were weaker than those in July.
The current rise in the employment indicator compared with the last quarter puts an end to a downward trend lasting around three years, which followed the peak of 16.8 points in mid-2022. The rise in the indicator in October compared with the third quarter suggests that – despite the US tariffs – the downward trend has not intensified recently but, on the contrary, there has been a modest improvement in the outlook. Despite the slight increase, however, the indicator remains well below its level of previous years and signals a modest recovery in the Swiss labour market overall.
The KOF Employment Indicator is based on the KOF Institute's quarterly Business Tendency Surveys and comprises two sub-components: current employment levels and employment prospects. The analysis conducted for the fourth quarter of 2025 is based on the responses of around 4,500 firms that took part in the KOF Business Tendency Surveys in October 2025. Compared with the last quarter, respondents are somewhat more confident about their current staffing levels and with a view to the months ahead. Assessments of the current employment situation are now slightly positive on balance, standing at 0.6 points, up from minus 0.4 points in the third quarter. Forecasts for the next three months have also improved, reaching 0.8 points after standing at minus 0.8 points in the last quarter. This means that the proportion of companies expecting to increase their workforces is once again slightly higher than that of firms planning to reduce them.
Sectoral picture remains mixed
Although the employment outlook for manufacturing industry remains clearly negative, it has improved slightly compared with the third quarter of 2025. The sector-specific indicator rose from minus 16.8 points in the third quarter of 2025 to minus 14.2 points in the fourth quarter. This means that far more firms in the manufacturing sector continue to expect job cuts rather than job creation. Employment prospects remain negative in the retail trade too. However, there are significant variations within this sector: the retail indicator improved slightly from minus 3.9 points in the third quarter to minus 2.8 points in the fourth quarter, while the wholesale indicator continued to deteriorate and now stands at minus 10.1 points (minus 8.4 in the last quarter).
The situation in the construction industry improved slightly in October 2025. The sector-specific indicator rose from 8.8 points in the third quarter to 9.9 points currently, reaching its highest level since the beginning of 2024. Sentiment in other services has also brightened compared with the last quarter. The corresponding indicator jumped from 7.3 points to 9.5. The construction industry and other services thus continue to make a positive contribution to the overall indicator.