/www.bloomberg.com/ By Andreas Britt
Bern, Nov. 28 (Bloomberg) -- The Swiss economy grew at the fastest pace in 1 1/2 years in the third quarter, boosted by the biggest increase in exports since the end of 2000.
Gross domestic product expanded an annualized 1.3 percent after growing 1 percent in the three months before, the State Secretariat for Economic Affairs said. Economists had expected an increase of 0.8 percent. GDP grew 0.6 percent from a year earlier.
``The increase in exports is today's Swiss GDP story,'' said Jan Amrit Poser, head of fixed-income research at Bank Sarasin & Cie in Zurich.
Europe's seventh-biggest economy emerged from its longest recession in a decade in the second quarter. Accelerating growth and a revival of exports may signal that the Swiss National Bank won't lower borrowing costs for a seventh time.
Interest rates are at the lowest level in almost three years after the SNB lowered the benchmark 3-month Libor to 0.75 percent in July. The bank's next quarterly meeting on rates is in two weeks and analysts expect it to keep rates steady.
Exports increased 6.2 percent from the second quarter, outperforming imports, which rose 0.3 percent in the quarter. Consumer spending rose 1.1 percent. Swiss-based Nestle SA, the world's largest foodmaker, sold 3.8 percent more goods in the third quarter than a year before.
U.S., Europe
The U.S., which buys 11 percent of Switzerland's goods exports, expanded an annualized 4 percent in the three months through September. Swiss deliveries to the world's largest economy rose 22 percent in September, according to the Federal Customs Office.
Switzerland's three biggest trading partners within the European Union -- Germany, France and Italy -- barely grew in the third quarter. Sales to Germany, destination of a fifth of Swiss exports, declined. Exporters account for about 45 percent of GDP.
``A moderate recovery can be expected if the geopolitical situation doesn't worsen and share prices don't fall any further,'' the state secretariat said in a faxed statement. For 2003, the secretariat sees ``a slight improvement, which will gain in intensity over the course of the year.''
The government expects GDP to contract 0.2 percent this year and expand 1 percent in 2003, revising down its previous forecast of 0.5 percent and 1.7 percent growth, respectively.
UBS Survey
``A year ago, we came to the year end and our plants were almost empty,'' said Martin Huber, chief executive officer of Georg Fischer AG, Europe's biggest auto-castings maker. ``This year, we have an entirely different situation. Our plants --especially in the car division -- will run through the day before Christmas, and some of them will start up again Jan. 2.''
At the same time, sales of Swiss industrial companies fell in the third quarter, forcing them to trim jobs, according to a survey by UBS AG, Switzerland's biggest bank. ABB Ltd., Europe's largest electrical-engineering company, Esec Holding AG, a maker of semiconductor machines, and Nextrom Holding SA, a cable-machinery maker, have either cut jobs or are in the process of doing so.
Investment in equipment such as machinery decreased 15 percent in the quarter, today's report showed. The government expects investment in equipment to drop 13 percent this year.
``The Swiss economy presents itself in a difficult condition at year end,'' Economiesuisse, Switzerland's biggest employers' organisation, said in an e-mailed statement. ``Capacities are rather badly utilized and profits unsatisfactory.''
Economiesuisse expects economic growth of between 0.5 percent and 1 percent next year, inflation of 1 percent and unemployment at around 3.3 percent.
Jobs
Switzerland's unemployment rate rose to 3 percent last month and will reach 3.5 percent by the end of the year, the government has said, weighing on people's economic expectations.
Employment rose 0.6 percent to 4.2 million people in the third- quarter, the Federal Statistics Office today said. The index of open jobs declined to a 4 1/2 year low.
The statistics office reports an annualized figure for economic growth, which corresponds to about four times the non-annualized rate. The government revised second-quarter figures, saying the economy expanded 1 percent. It originally said the economy grew at a 0.4 percent annualized rate.