Bloomberg News

Swiss Investor Sentiment Shows Negative Reading for Sixth Month

October 20, 2011

Oct. 20 (Bloomberg) -- Swiss investor confidence showed a negative reading for a sixth month in October, adding to signs of a deepening economic slowdown.

An index of investor and analyst expectations, which aims to predict economic developments six months in advance, increased to minus 54.4 from minus 75.7 in September, the ZEW Center for European Economic Research in Mannheim, Germany, and Zurich-based Credit Suisse Group AG said in an e-mailed statement today. A gauge of analysts’ assessment of the economic situation fell to 11.4 from 18.9 in September.

Switzerland’s export-led recovery is cooling as the franc’s ascent hurts earnings of some of the country’s largest companies such as Nestle SA just as euro-region growth weakens. Swiss exports declined in the third quarter, the government said today, and Winterthur, Switzerland-based pump maker Sulzer AG this month predicted a slowdown in full-year order growth, citing “uncertainties in the financial markets.”

“Slowing global demand and the European debt crisis are a lethal cocktail for economic growth in our country,” said Ralf Wiedenmann, chief economist at Vontobel Asset Management Ltd. in Zurich. “I expect the Swiss economy to stagnate in the year’s second half, followed by a slight recovery.”

About half of analysts forecast the Swiss central bank to raise its franc ceiling of 1.20 versus the euro imposed last month, Credit Suisse said. More than 60 percent of participants forecast the cap to have a stabilizing effect, while 30 percent said the ceiling is too low. Around 63 percent of analysts also said the Swiss economy will be able to avert a recession.

The survey was conducted Oct. 6-17, with 35 analysts participating. Balances refer to the difference between positive and negative assessments.

--Editors: Simone Meier, Craig Stirling

To contact the reporter on this story: Klaus Wille in Zurich at

To contact the editor responsible for this story: Craig Stirling at

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