Switzerland’s GDP rose by 0.2% in the 4th quarter of 2018*. As in other European countries, this confirms a slowdown of the economy compared to the first half of the year. After a weak 3rd quarter (revised GDP growth: −0.3%), the economy at least returned to a moderate growth path.

This was largely due to manufacturing (+1.5%). Following a breather in the 3rd quarter, the sector returned to dynamic growth, especially in the chemical and pharmaceutical segment. However, other industries also reported turnover increases, such as the watchmaking and precision instrument industry as well as the food industry. Manufacturing benefited from the strong international demand for Swiss products: exports of goods**(+5.6%) grew substantially.

Development in the service industry varied in the 4th quarter. In healthcare (+0.9%) and in business-related services (+0,4%) value added grew once again. Meanwhile trade (−0.6%) recorded its third negative quarterly figure in a row: the slight recovery seen by retail trade could not compensate for the drop in wholesale. The negative development of the previous quarter also continued in the financial sector (−0.8%). Overall, the development of the service sector remained below the historical average, curbed by declining exports of services (−2.6 %) and a final domestic demand which remains sluggish (−0.0%).

After a very weak previous quarter, the consumption expenditures of private households (+0.3%) saw a moderate rise, mainly due to health spending. Investment in construction (−0.4%), however, dipped slightly, particularly as a result of decreasing activity in building construction. Investment in equipment (−1.1%) recorded a considerably sharper decline. This can largely be traced back to the volatile research and development category, although investment activity was subdued in the other areas too. Reflecting the weak domestic demand, imports*** of goods and services (−0.5%) fell slightly.

Initial provisional results for 2018
The provisional real GDP growth rate for 2018 is 2.5%. With this result, the Swiss economy has achieved growth comparable to that of 2014 (2.4%) for the first time again. Growth in the first half of 2018, in particular, was significantly above average. In the second half of the year, the economy weakened noticeably both in Switzerland and abroad.

Over 2018 as a whole, manufacturing was the strongest driver of growth. The sector was able to benefit from high international demand for Swiss industrial goods. Most of the other industries were also able to expand. A major exception is trade, which registered a decline in value added for the first time since 2011.

On the expenditure side, foreign trade provided the greatest impetus for growth. By contrast, domestic demand developed less dynamically. Private consumption, in particular, saw below-average growth, having been curbed by the weak development of real purchasing power. Investment in construction and equipment also lost momentum compared to 2017.

* Percentage changes on the previous quarter of chained series, price, seasonal and calendar-adjusted national accounts aggregates in accordance with ESA 2010.
** Excluding non-monetary gold and valuables.
*** Excluding non-monetary gold and valuables.

Gross domestic product in the 4th quarter of 2018: return to moderate growth