Measures overall economic activity through a qualitative business survey about developments in the recent past, the current situation and expectations for the next three to six months. Survey questions relate to production, orders and stocks of finished goods. The Swiss Institute for Business Cycle Research (KOF) publishes this indicator monthly.

The KOF institute sponsors a number of business surveys, namely a monthly industry survey, a monthly retail trade survey, and a quarterly wholesale activity survey. These surveys, along with other information, are used to construct the monthly KOF composite leading indicator, which aims to track GDP growth and provide indications of major cyclical turning points about eight months in advance. In practice, the indicator appears to give a reading of the behaviour of GDP growth in the quarter of the reference month. Results are reported as the percent balance between optimistic and pessimistic responses. In addition to the monthly industry survey, the KOF also conducts a more exhaustive quarterly survey, which includes information on capacity utilization.

The composite leading indicator has six components: the change in manufacturers' orders inflow compared to the previous year's month; the change in manufacturers' order backlog over the previous month; manufacturers' expected purchase of intermediate and raw materials within the next three months; the judgement of stocks in wholesale business (quarterly series); households' judgements of their financial situation in the next year (from the quarterly survey of consumer confidence by the State Secretariat for Economic Affairs); and the quantitative year-to-year change in real orders' backlog in the construction sector (quarterly series). The three quarterly components of the leading indicator are introduced into the calculations for the KOF leading indicator for the reference month after the end of that quarter. The six component series are seasonally adjusted before being combined into the composite leading indicator.

Relevance: Rarely affects markets
Release schedule: 9:30am GMT (about 5:30am EST); monthly, in the last week of each month
Revisions schedule:
Source of report: Konjunkturforschungsstelle Swiss Institute for Business Cycle Research
Web Address: http://www.kof.ethz.ch/
Address of release: http://www.kof.ethz.ch/ (refer to 'News' section for most recent report)
AKA: Swiss Leading Indicators