Economy: Companies unfazed by the slowdown

After a difficult year in 2025, the Swiss economy is continuing its recovery. The clear growth seen in the spring looks set to be followed by solid summer months, as suggested by the latest available economic data. The significantly higher levels of optimism among Swiss companies are encouraging. In the services sector in particular, the order situation has improved significantly, underpinned by robust consumer spending by the Swiss public. In the industrial sector, the recovery remains fragile, and limited to a few industries. However, there is virtually no challenge from inflation at present: at 0.4 percent, it is very low by international standards, and the Swiss National Bank (SNB) is therefore under no pressure to take action.

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The US economy has now cooled off. Over the past three quarters, the economy has grown by just 0.3 percent on average – less than half the rate seen in previous years. The labour market is also again showing signs of weakness, with approximately 23,000 jobs lost in July. So far, however, the slowdown has had little impact on business sentiment, suggesting that any further weakening or potential coming recession is unlikely. Nevertheless, the economic slowdown remains a cause for concern, in particular for the US Federal Reserve as it also contends with inflation, which at 3.4 percent is still too high and leaves little room for any change in monetary policy.

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The eurozone is continuing its tentative recovery. Despite the persistent weakness of the two major economies, Germany and France, it grew by 0.4 percent in the second quarter of 2026. Following the significant dampening of sentiment in recent months as a result of the war in Iran, the outlook in the services sector has also brightened again recently. However, key export sectors continue to grapple with structural problems, and this is limiting the recovery. At the same time, many companies are finding it very difficult to pass their higher production costs onto consumers. Yet this is exactly what is keeping inflation from spiralling out of control, which means that despite inflation running at 2.9 percent, any further interest rate hikes by the European Central Bank (ECB) are not necessarily a given.

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Among the major emerging economies, the economic picture remains mixed. China, by far the largest economy, remains mired in crisis, even if official growth figures try to suggest otherwise. Investment activity is now almost 6 percent below the previous year’s level, and growth in consumption is also negligible. Nor are there any signs of these trends reversing yet. Given the high levels of debt, the Politburo in Beijing shows little willingness to implement effective stimulus measures. India, the world’s second-largest economy and one of the most important engines of global economic growth in recent years, continues to show a great deal more resilience. However, against the backdrop of the turmoil surrounding the blockaded trade routes in the Gulf region, growth in India has also slowed significantly.

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