On the expenditure side, household consumption increased at a faster 0.3 percent in the fourth quarter (vs 0.1 percent in Q3), mainly supported by health spending; and government expenditure edged up 0.1 percent, reversing a 0.1 percent decline in Q3. In addition, net foreign demand contributed positively to the GDP, as exports of goods and services rose 2.8 percent (vs -2.7 percent in Q3), led by goods (5.6 percent vs -4.1 percent), while imports fell 0.5 percent (vs -2.4 percent in Q3). In contrast, investment in equipment and software contracted 1.1 percent (vs -1.9 percent in Q3) due to the volatile research and development category; and construction spending dropped 0.4 percent (vs -0.2 percent in Q3) particularly as a result of decreasing activity in building construction.
On the production side, manufacturing output grew 1.5 percent, following a contraction in the previous period, boosted by the chemical and pharmaceutical segemnt. Other industries also reported turnover increases, such as the watchmaking and precision instrument industry as well as the food industry. Within services, growth was recorded for healthcare (0.9 percent) and business-related services (0.4 percent), while a contraction was seen in trade (-0.6 percent), due to a drop in wholesale, and in the financial sector (-0.8 percent).
Year-on-year, the GDP grew 1.4 percent in the fourth quarter, easing from a 2.4 expansion in the previous quarter and also missing market forecasts of 1.7 percent. It was the weakest annual growth rate since the June quarter of 2017.
Considering 2018 full year, the economy grew 2.5 percent, faster than 1 percent in 2017. On the expenditure side, foreign trade provided the greatest impetus for growth. By contrast, domestic demand developed less dynamically: private consumption, in particular, saw below average growth, having been curbed by the weak development of real purchasing power; and investment in construction and equipment also lost momentum compared to 2017. On the production side, manufacturing was the strongest driver of growth. The sector was able to benefit from high international demand for Swiss industrial goods. Most of the other industries were also able to expand. A major exception is trade, which registered a decline in value added for the first time since 2011.