Swiss Regional Economic Commentary 4th Quarter 2024
Mixed economic development in the Swiss cantons
The economic situation in the cantons drifted further apart in the 3rd quarter.
This is the third edition of the Swiss Regional Economic Commentary based on the Swiss Regional Economic Index (Swiss REco Index) and the corresponding dashboard of the University of Applied Sciences of the Grisons (FHGR). The Swiss REco Index is a monthly nowcast of the gross domestic product (GDP) of the Swiss cantons.
The economic upward trend that began in the summer has continued in some cantons, while it has slowed noticeably in others. At national level, the Swiss REco Index for the third quarter of 2024 shows moderate growth of +0.73 % compared to the same quarter of the previous year, but the growth rate weakened to 0.43 % in October. Compared to the SECO index of weekly economic activity and the current SECO GDP Flash, which expect growth of 1.6 % and 1.7 % respectively for the third quarter compared to the same quarter of the previous year, the Swiss REco Index shows a more cautious assessment of the economic situation. The KOF Business Situation Indicator, which is based on surveys, also remains in positive territory in the third quarter, but also shows a slight decline.
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Inconsistent development in the cantons
A look at the nowcasting data for the cantons reveals a very mixed picture: the Swiss REco Index shows strong growth for the cantons of Geneva (+3.89 %), Basel-Stadt (+2.89 %) and St. Gallen (+2.19 %). In contrast, economic output shrank in the cantons of Vaud (-1.40 %) and Aargau (-2.62 %). The canton of Zurich is above the Swiss average, while the index for Bern stagnated again in October after an interim high in September. The weak development in the canton of Aargau is particularly striking, where the significant downturn has been ongoing since the summer and the data so far shows no signs of a turnaround
Fig. 1: Growth rate of the Swiss REco Index
(compared to the same month of the previous year in percent)
Cantons in Central Switzerland show a clearly positive economic trend
The nowcasting data of the Swiss REco Index points to above-average economic development in the cantons of Central Switzerland. Although a certain degree of caution is required when interpreting smaller cantons such as Uri, the economically important cantons of Lucerne and Zug are also showing robust growth. In the third quarter, the Swiss REco Index for Lucerne and Zug recorded an increase of 1.91 % and 2.81 % respectively, and growth remained at a high level in October at 2.58 % and 3.41 %. The canton of Schwyz is showing less dynamic development, but is still above the average for Switzerland as a whole.
Fig. 2: Growth rate of the Swiss REco Index in Central Switzerland
(compared to the same month of the previous year in percent)
Attractive job advertisements in Central Switzerland
The positive economic situation in Central Switzerland is also reflected in the development of job advertisements. The online job adverts recorded by x28 AG show significant growth for the cantons of Central Switzerland in the third quarter, while the number of job adverts fell slightly at a national level.
Fig. 3: Growth rate of job advertisements from x28 AG
(compared to the same month of the previous year in percent)
Why is electricity consumption in the canton of Glarus highly volatile?
The dashboard data also makes it possible to visualise structural changes. A comparison of the growth rates of electricity consumption between Switzerland as a whole and the canton of Glarus illustrates the strong fluctuations in Glarus. No other canton shows such monthly fluctuations. The growth rates range from plus 100 % to minus 60 per cent. The dashboard also shows the absolute levels of electricity consumption. Since 2019, electricity consumption in the canton of Glarus has been around three times higher than in 2018.
The reason for this is the Limmern pumped storage plant, which has been fully operational since 2019 and acts as a huge battery in the Glarus Alps with a capacity of 1,000 MW. This plant utilises low electricity prices to pump water into high-altitude reservoirs and produces electricity when prices are high through controlled water discharge. The Swissgrid data shown in the dashboard also includes electricity consumption in pumping mode. This consumption is not only very high - around three times the combined consumption of industry and households in the canton of Glarus - but also highly volatile.
Fig. 4: Growth rate of electricity consumption in the canton of Glarus
(compared to the previous month in percent)
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Barbara Breig
Business Development
hpo forecasting ag
What is Swiss REco?
The Swiss Regional Economic (Swiss REco) Dashboard is a collection of continuously updated real-time data on economic development in the individual cantons of Switzerland. It was developed by Prof. Dr Peter Moser and Dr Adhurim Haxhimusa from the Centre for Economic Policy Research at the University of Applied Sciences of the Grisons (FHGR) and has been distributed exclusively by hpo forecasting ag since 2024.
The information portal is a powerful tool for institutions that need to be informed promptly about economic developments in their regions. At the heart of the dashboard is the Swiss Regional Economic Index, a well-founded estimate of current economic growth, specific to each canton in Switzerland.