UBS Hoefert

Personnel Compensation in Switzerland - Outlook for 2004: 

Personnel Compensation in Switzerland - Outlook for 2004 Dr. Andreas Höfert Head Economic Research, UBS WM&BB Swiss American Chamber of Commerce, Geneva, 31 October 2003

Slide2: 

Switzerland: two recessions within two years … % change of real GDP (3) (2) (1) 0 1 2 3 4 5 1995 1996 1997 1998 1999 2000 2001 2002 2003 previous year previous quarter Source: seco, UBS WM Research

… caused by the international downturn … : 

… caused by the international downturn … -2 -1 0 1 2 3 4 5 95 96 97 98 99 00 01 02 03 GDP in Swiss principal export markets (Ger, Fra, Ita and USA) GDP Switzerland % change of real GDP on previous year Source: Datastream

… and a huge drop in investment spending: 

… and a huge drop in investment spending % share of real GDP (smoothed) Source: seco, UBS WMR

Companies are more optimistic …: 

70.7% 29.3% 0% 2004 survey Companies are more optimistic … 28% 63.9% 8.3% upswing stagnation recession 2003 survey What are your expectations about the economic performance of the Swiss economy in year… ? Source: UBS compensation survey

Slide6: 

… so are we : % change of real GDP on previous year Source: Datastream

Swiss economy towards brighter days: 

Source: seco, KOF, SVME Swiss economy towards brighter days

Slide8: 

Switzerland: forecast overview Forecast of September 2003 ye = year-end F = Forecast UBS Wealth Management Research

On average wage expectations were fulfilled: 

On average wage expectations were fulfilled 2.1 2.0 2.0 2.0 1.9 1.5 1.3 1.2 1.2 0.9 0.9 0.8 0.8 0.8 0.7 0.6 2.4 0.3 2.4 IT Services Telecommunications Chemicals, Pharmaceuticals Retail Trade Hotels, Restaurants Cantons Energy Food, Beverages Automotive Federal Government Machinery, Electronics, Metals Media Insurance Textiles, Garments Transport, Aviation Watches Banking Printing, Graphics Construction Expected Swiss average 2003: 1.3% Source: UBS compensation survey

UBS Personnel Compensation Survey 2003: 

UBS Personnel Compensation Survey 2003 Growth rate of nominal wages Source: UBS compensation survey, federal statistics office

Employment and wages are negatively correlated: 

Employment and wages are negatively correlated Growth rate of nominal wages and unemployment 0% 1% 2% 3% 4% 5% 6% 7% 8% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Nominal wage index (change in % on previous year) Source: BFS, seco

Unemployment: peak in winter months: 

Unemployment: peak in winter months Source: seco, UBS WMR

Wage growth: Industry breakdown for 2004: 

Wage growth: Industry breakdown for 2004 Source: UBS compensation survey Expected inflation: 0.5% Expected growth of real wages: 0.4%

Course of business is reflected in wage increase: 

Course of business is reflected in wage increase Average course of business of sectors according to quarterly UBS industry survey (2003 values) Expected growth of nominal wages Printing, Graphics Watches Textiles, Garments Food, Beverages Chemicals, Pharmaceuticals Source: UBS compensation survey, UBS industry survey Construction MEM

Change of bonus payments in 2004: 

Change of bonus payments in 2004 How will bonus payments change compared to last year's payments? Source: UBS compensation survey

Staff planning… : 

Staff planning… How has/will your workforce change? Source: UBS compensation survey

… and unemployment expectations: 

… and unemployment expectations How will the unemployment rate develop? Source: UBS compensation survey

Contact: 

Contact UBS AG Dr. Andreas Höfert Wealth Management & Business Banking Postfach CH-8098 Zürich Tel: +41-1 234 6739 Fax: +41-1 234 4166 www.ubs.com