In manufacturing (−0.0%), value added stagnated following four quarters of above-average growth. International headwinds are continuing to hit cyclically sensitive sectors such as machinery and metals, which suffered further falls in turnover. Although the chemical and pharmaceutical industry bolstered overall economic growth, it could not quite repeat the fast pace of previous quarters. Exports of goods** (−0.5%) fell slightly and imports of goods** (−2.7 %) substantially.

Investments in machinery and electrical equipment, which are more sensitive to the economic cycle, declined in step with the international development; overall, companies were hesitant to invest in their production capacities. Nevertheless, investment in equipment (+2.4%) rose thanks to investments in aircraft, which are generally highly volatile. Investment in construction (+0.4%) increased, as did value added in construction (+0.9%). Consumption expenditure by both private households (+0.4%) and the government (+0.5%) rose somewhat faster overall than in the previous quarter, driven not least by falling consumer prices. Domestic demand saw modest growth on the whole.

This also benefited most service sectors. For instance, trade (+1.2%) posted strong growth, underpinned primarily by car sales. The sizeable business services sector (+0.2%) also returned to slight growth after two quarters in negative territory. In addition, public administration (+0.5%) and healthcare (+0.5%) supported growth. By contrast, transport and communications (−0.3%) and finance (−0.4%) continued the middling performance seen in previous quarters, with foreign trade also curbing growth in both sectors. Exports of services performed fairly averagely overall (+0.8%), while imports of services dropped (−1.8%).

Initial results for 2019
The provisional real GDP growth rate for 2019 is 0.9% (2018: 2.8%), or 1.4% (2018: 2.3%) after adjusting for sporting events. The Swiss economy thus grew at a similarly modest pace as in the years 2015 and 2016.

As in the previous year, manufacturing proved to be the biggest growth driver, although there was substantial heterogeneity between industry sectors. The service sector also contributed to GDP growth, albeit with a slower growth rate than in 2018. On the expenditure side, both foreign trade and domestic demand supported growth.

* Real percentage changes on the previous quarter. Data and further information: www.seco.admin.ch/gdp.
** Excluding valuables.

Gross domestic product in the fourth quarter of 2019: economy confirms slowdown