Economy: USA the focus of global economic concerns

Sentiment in the Swiss economy remains subdued. Consumers, industrial companies and service providers are far more pessimistic about the future than on average over the past 25 years. The decline in confidence in the service sector is particularly striking. A more negative assessment of the business situation was only ever seen briefly during the Covid pandemic. The current 39 percent tariff rate is likely to exacerbate the situation, particularly for industrial companies. With goods exports to the USA directly accounting for around 4 percent of Switzerland’s economic output, this threatens to be a major setback. Given the sharp price increases on the US market, it will be difficult for many companies to remain competitive. 

Growth, sentiment and trend

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According to initial estimates by the Bureau of Labor Statistics, the US economy grew by 0.6 percent in the first six months of 2025. This indicates that economic growth has slowed considerably compared to previous years. The slowdown is also likely to have continued at the beginning of the third quarter, as suggested both by weaker sentiment among US companies and momentum on the labour market. For example, the number of new jobs created has recently declined significantly. This is particularly unwelcome given that inflation is beginning to rise again even as the economy levels off. Core inflation, which excludes volatile price components such as food and energy prices, climbed to 3.1 percent in July. Given an estimated average tariff rate of 15 to 20 percent on all imported goods, price pressure is likely to increase further in the coming months. It means the US Federal Reserve will face the difficult task of managing a weakening economy and rising prices at the same time.

Growth, sentiment and trend

In percent

As expected, the eurozone economy was stagnant in the second quarter of 2025. It benefited in the first quarter from US orders being brought forward by companies in an effort to pre-empt the latest tariffs, and saw significant growth as a result. The reversal that followed in the second quarter had a dampening effect on the economy. However, there are signs of a moderate recovery at the beginning of the third quarter. Sentiment in industry and the services sector has improved and export figures have stabilized. However, some negative factors persist. The newly negotiated punitive US tariffs of 15 percent look set to weigh on the fragile upturn in the coming months, making any major growth impetus unlikely for the time being. On a positive note, inflation is down over the year to date, and is now close to the European Central Bank’s (ECB) target.

Growth, sentiment and trend

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In China, the biggest economy among the emerging markets, sentiment in the services sector has clearly improved, while retail sales are also well above the previous year’s level. Both of these developments point to a stabilization of the domestic economy. On another positive note, inflation has moved away from its lows and exports continue to show solid growth despite 30 percent US tariffs. So far, the decline in demand from the USA has partly been offset by stronger demand from other Asian countries. However, any sustained recovery looks unlikely for the time being, as the private sector’s reluctance to invest is clearly holding back overall economic momentum. 

Growth, sentiment and trend

In percent