The November Swiss KOF index declined to 102.2 from a revised 103.9 in October, which was originally reported at 104.7. The latest reading was also lower than market expectations of a figure around 104.3 although it remained above the long-term average.
There was a monthly deterioration in the hotel and catering industry, together with manufacturing. There was a slight monthly upturn in the financial sector and there was greater optimism surrounding the international outlook.
The manufacturing deterioration reflected increased concerns surrounding the competitive outlook and a weaker outlook for exports with overall conditions in the manufacturing sector still described as challenging.
According to the KOF, the latest data indicates that growth in the Swiss economy should remain close to its long-term average in the near future.
With increased competitiveness concerns within the economy, the National Bank will remain sensitive to exchange rate moves and will remain concerned that currency strength will trigger another round of cost cutting, which would put downward pressure on inflation.
The franc weakened after the data, although the move had already started ahead of the data release and the franc weakness was not directly linked to the data. EUR/CHF moved to test the 1.0800 level for the first time in 3 weeks as USD/CHF continued to hold above 1.0100.