The KOF Employment Indicator has fallen slightly in the first quarter of 2025 compared with last quarter. This decline is primarily due to the worsening employment prospects in the retail and manufacturing sectors. Overall, the Swiss labour market is expected to remain subdued this quarter and next.
In the first quarter of 2025 the KOF Employment Indicator has fallen to 2.6 points, down from 3 points (revised from 3.9 points) in the last quarter of 2024. The indicator is thus continuing to move towards its long-term average of 1.5 points. The analysis conducted for the first quarter of 2025 is based on the responses of around 4,500 firms that were surveyed in January about their employment plans and forecasts. As the KOF Employment Indicator is used to predict the actual employment trend, the current indicator value points to a moderate employment trend on the Swiss labour market over the coming months.
The modest decline in the employment indicator is attributable to both of its sub-components. On balance, the firms surveyed rate the employment outlook for the next three months as being slightly less positive than it was three months ago (2 points compared with 2.5 points one quarter ago). In addition, their assessment of the employment situation has also deteriorated slightly overall (3.2 points compared with 3.5 points one quarter ago).
Bleak employment prospects in manufacturing
The sectors with the most negative employment outlook are wholesale and manufacturing. In manufacturing, for example, a clear majority of firms consider their current staffing levels to be too high on balance and are planning to reduce them over the coming months. The KOF Employment Indicator for this sector has fallen further since last quarter and now stands at minus 12.4 points. It has been in negative territory since mid-2023.
On balance, most of the firms surveyed in the retail, wholesale and hospitality sectors are also planning to reduce their workforces. In the other sectors, however – particularly in insurance, construction and other services – the number of firms that expect to increase their headcount exceeds those that do not.