favourable housing market developments. third, exports were relatively resilient to international headwinds. fourth, as we have already seen, monetary policy acted to limit the negative impact of the swiss franc ’ s massive appreciation. let me now elaborate on the structural factors that have played an important role in strengthening the resilience of the swiss economy to shocks. i will start by focusing on some interesting shifts that have taken place in the structure of swiss international trade. 4. 1 innovative and diversified swiss international trade looking at the structure of switzerland ’ s international trade will allow me to dispel some wellestablished preconceptions about the swiss economy. if i asked you to list some core swiss economic sectors, you would probably mention banks, watches and chocolate. but switzerland is much more than that. the swiss economy is in fact highly diversified. for example, the share in total value added of the sector comprising financial, insurance and bis central bankers ’ speeches business services is smaller than the eu average ( 20. 3 % vs 26. 2 % in 2012, according to oecd figures ). by contrast, the share of the manufacturing sector is significantly larger. overall, the amount of goods and services that switzerland sells abroad is equivalent to half of its gross domestic product ( gdp ). goods dominate export activity but, with a share of one - third, the contribution of services is by no means negligible. the export intensity is significantly above the oecd average. switzerland is surpassed by the benelux countries, however. part of the gap with the benelux reflects the extensive re - exports of imported goods generated by the activity of the world - class ports in belgium and the netherlands. admittedly, access to the sea is not a key comparative advantage of switzerland … in order to maintain competitiveness, the swiss export sector has gone through profound structural changes during the last decades. first, there has been a shift in the composition of the export sector ( figure 4 ). the pharmaceutical industry has gained in importance, whereas the share of exports of machinery has declined. in passing, let me just mention that the popular cliche which associates switzerland with watches is actually true. their share in total goods exports is sizeable ( 11 % ). note, however, that this has nothing to do with cuckoo clocks, which were invented and are produced in germany. a closer look at the development across industries reveals that this compositional shift is important in understanding swiss performance during the crisis.

and higher prices for some other goods. this is causing households to delay spending on these items. we expect these global supply chain problems will gradually be resolved, but it could take some time. employment bounced back through june and july as restaurants, stores and high - contact services reopened. a pickup in demand for recreational activities and domestic tourism also supported hiring. with these hard - hit sectors recovering, the unevenness in the labour market is moderating. but considerable slack remains, and some groups are still being disproportionately affected – particularly low - wage workers. increases in the number of hours people worked in july and higher reported job vacancies both point to continued solid job gains. at the same time, we are hearing from some businesses that the process of finding and hiring workers is proving complicated and time - consuming. and for some companies, this has made it hard for them to keep up with the rebound in demand. we have all seen help wanted signs at restaurants and stores. achieving full employment is essential to a complete recovery and sustainably achieving our 2 percent inflation target. that ’ s why it is critical that we understand how canada ’ s labour market is recovering. bank staff are studying this process carefully to help us assess what it means for overall labour market slack. 1 pulling this all together, the governing council continues to expect the economy to strengthen in the second half of 2021, although the fourth wave of covid - 19 infections and ongoing supply bottlenecks could weigh on the recovery. let me turn now to inflation. as you know, we target 2 percent inflation, the middle of a 1 to 3 percent control range. inflation is above that range now, mostly because of the unique circumstances of the pandemic. covid - 19 and the economic fallout caused the prices for many goods and services to plunge last year. this year ’ s inflation rate compares prices now with their depressed levels a year ago, making the increase appear more dramatic. in addition, the global supply disruptions i have talked about are leading to higher prices for motor vehicles and other goods. we continue to expect that these factors pushing up inflation will be transitory, but their persistence and magnitude are uncertain and we will be monitoring them closely. we are also watching wages and measures of expected inflation. wage increases have been moderate to date, and medium - term inflation expectations remain well - anchored. against this background and the considerable excess capacity in the economy, the governing council yesterday decided that the recovery continues to