Swiss economy on track for recovery despite omicron wave according to KOF

Admittedly, many workers are currently in quarantine or isolation, but according to a special question from KOF, the loss of turnover due to employee absences remains limited.

The recovery of the Swiss economy continues despite the omicron wave at the beginning of the year. This is shown by the KOF Business Trends Surveys for January. Admittedly, many workers are currently in quarantine or isolation, but according to a special question from KOF, the loss of turnover due to employee absences remains limited. On the other hand, the availability of intermediate products remains an issue.

The omicron wave causes a staff shortage

As of the second half of 2021, complaints about the lack of qualified personnel have increased in many sectors. Today, the absence of employees due to the omicron wave further aggravates the tense situation of the staff. In a special question asked in January of companies that participated in KOF’s business surveys online, they were asked what proportion of their total workforce was in quarantine or isolation as a result of a COVID infection in the past two weeks. All sectors combined, this proportion was around 7%. In line with the evolution of the number of cases, the absence of staff tended to increase among companies that participated later in the survey compared to those that responded in early January. It is in the hotel and restaurant sector that the absence of declared personnel was highest.

However, the impact on turnover remains limited in most cases.

Another special question investigated the impact of isolation and quarantine absences on facility turnover in the two weeks prior to the survey. On average, around 9% of establishments that responded to the special question indicated that staff absences led to a decrease in turnover. But we also noticed that companies can often compensate for the absences of a small part of the staff. At participating companies, the loss of turnover is around 1% when up to 15% of employees are in quarantine or isolation. However, the drop in turnover is markedly accentuated when absenteeism increases. In other words, companies manage to absorb low staff absences very well. It is only in the event of a significant absence that significant effects on turnover are felt. The decrease in turnover is particularly pronounced in hotels and restaurants, already affected by the pandemic. Overall, hotel and catering establishments that complain about the lack of customers, however, clearly remain in the majority compared to those that complain about unavailability or unavailability of manpower.

Sectors move in different directions

The gap caused by the coronavirus in the business situation increases again slightly among the surveyed economic sectors: where the business situation was already more favorable than average, it tends to improve even more. This is the case for manufacturing, retail, construction and project studies, as well as financial and insurance service providers. On the other hand, in sectors where the business situation is already slightly below average, that is, other services and hotels and restaurants, the recovery is stagnating. In the hospitality sector, companies that responded later tended to rate the business situation less favorably than those that responded earlier in the month. In the other sectors, this trend is less pronounced.

Intermediate products remain rare

In the sectors of production and distribution of goods (manufacturing, construction, retail trade, wholesale trade), the availability of inputs continues to be a major problem, which even tends to overcome the lack of personnel. However, difficulties related to inputs in civil construction and retail trade did not increase in relation to the fall. In manufacturing and wholesale, on the other hand, they increased, although there was also a stabilization at a high level at the beginning of the new year. In these two sectors, more than half of the companies that responded to the survey currently report interruptions due to tensions in the supply of inputs.

Prices are rising in almost every industry

In January, price increases continued in many economic sectors. Pressure on prices is again particularly pronounced in the sectors of production and distribution of goods, namely manufacturing, construction, retail and wholesale trade. Also in the other services, the upward trend in prices was accentuated at the beginning of the year in all branches.

Results from the latest KOF Business Trends Surveys for January 2022 are based on responses from nearly 4,500 companies in the industry, construction and major service sectors. This corresponds to a response rate of approximately 58%.

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