Switzerland's real GDP rose by 0.7% in Q2 compared to the previous quarter, with growth mainly driven by a large increase in equipment and software investment and a further expansion in consumer spending, the State Secretariat for Economic Affairs (SECO) stated on Tuesday. Net exports have also contributed positively to GDP growth, SECO added.

With an increase of 0.5%, the pace of growth in household expenditure slowed slightly in the second quarter of 2007. An increase was recorded in almost all areas of expenditure and was particularly marked in the sectors of healthcare, furniture, communications and financial and insurance services. Final consumption expenditure by general government fell by 0.1%.

Total investment expanded by a robust 2.6%. The reverse trends in construction and in equipment and software investment, which began last year, have been reaffirmed in Q2 2007: while investment in equipment and software increased significantly (+7.6%), investment in construction has continued to fall (-3.7%).

After a period of strong growth (in recent quarters), exports of goods and services expanded more moderately (+0.5%). However, this reduced pace of growth was due only to goods exports (-0.5% incl. valuables, +0.9% excl. valuables). Exports of services on the other hand gathered pace, growing strongly by 3.1%. After a decline in the previous quarter, imports of goods and services showed a rise of 0.9% in Q2 in both goods (+0.9%) and services (+0.9%).

On the production side, value added has increased significantly in the sector dominated by industry (+1.2%). An increase of the same magnitude has also been recorded in the sector comprising trade, hotels and restaurants, transport and communications (+1.2%) and in the sector dominated by financial market services (+1.2%). By contrast, in the construction sector value added fell by 1.5%. In two other sectors, value added also experienced a slight drop: in public services (-0.2%) and in the agriculture sector (-0.9%).