Switzerland’s KOF Economic Barometer rose by 1.6 points to 109.1 in September, extending a run of monthly gains and keeping the indicator clearly above its medium-term average. The previous month’s reading was revised to 107.5. Action Forex reported that the result also exceeded the 105.8 consensus forecast, giving markets a stronger-than-expected signal about the near-term Swiss economic outlook. KOF said the overall picture remained favourable after the latest increase.
The improvement was broad across several parts of the domestic economy. KOF identified manufacturing, services and construction as the indicator groups making particularly positive contributions in September. Within producing industries, which combine manufacturing and construction, most measures of business activity improved. Indicators tied to exports, inventories of intermediate products and the general business situation all pointed to a brighter outlook, although measures of employment prospects remained under pressure.
Manufacturing supplied much of the positive momentum, but the improvement was not uniform across industries. KOF said indicators for the chemical and pharmaceutical sector, paper and printing products, and textiles developed particularly favourably. By contrast, indicators for machinery and equipment manufacturing slowed. The report also showed weaker signals from foreign demand and from financial and insurance services, tempering the strength seen in domestic production-related categories.
The September release coincided with KOF’s annual revision of the barometer. Its updated pool contains 538 economic time series, while the new 2026 vintage selects 327 variables for the index, compared with 342 in the 2025 vintage. KOF added 33 indicators and removed 48 through its automated selection process. The reference series is the smoothed monthly distribution of Swiss real GDP growth from 2016 through 2025, based on official quarterly data adjusted for major international sporting events.
KOF designed the barometer as a leading composite indicator of the Swiss business cycle. The institute selects variables that have a plausible economic relationship with the cycle and a sufficiently strong lead over its GDP reference series. The final index is a rescaled weighted average of the selected indicators, with weights based on the first principal component. September’s 109.1 reading therefore reflects a wide set of forward-looking signals rather than a single survey or one sector’s performance.
What it means for traders: The upside surprise strengthens the evidence that Switzerland’s near-term domestic outlook remains resilient, a factor that can matter for USD/CHF when markets reassess the relative strength of the Swiss economy. The mixed composition is equally important: manufacturing, services and construction improved, while foreign demand, finance and employment indicators were softer. A sustained rise in subsequent readings would reinforce the favourable signal; a reversal led by external demand or hiring would narrow it.
The next points to watch are whether the improvement carries into hard activity data and whether the weaker employment and foreign-demand components stabilize. Traders will also be able to compare the September barometer with upcoming Swiss GDP, inflation and central-bank communication. Because KOF introduced its annual variable revision in this release, future monthly moves will be measured using the new 327-variable vintage, making the direction and breadth of the next reading especially useful for judging whether September’s strength persists.