Nearly half of Swiss industrial companies plan to escape the strong franc by moving at least parts of their manufacturing production abroad, according to a survey by lobby group Swissmem.
The franc has increased in value against the euro and dollar ever since the Swiss National Bank (SNB) ended its policy of printing huge amounts of local currency in January 2015. As a result, 57% of firms in the electrical engineering, fine tools and machine building industries have seen margins erode to unsatisfactorily low levels or even negative territory.
Swissmem’s surveyexternal link, conducted together with the University of St Gallen, found that 46% of firms plan to move production abroad within the next three years.
“The main reason for this is to reduce production costs. Apart from product and process innovation, this is the only way in which businesses can increase their profitability in Switzerland,” Swissmem said in a press statement.
The survey also predicted a decrease in manufacturing jobs and an increase in research and development activities in Switzerland. Some 12,600 manufacturing jobs have been lost in Switzerland in the last two years, according to Swissmem.
This is not the first time that the manufacturing production drain has come to light in Switzerland. Last year, research from Lausanne’s Federal Institute of Technology (EPFL) found that Swiss companies are investing more heavily abroad.
The proportion of investment outlay spent abroad rose from 45% to 63% in the year after the SNB pulled the plug on its franc defence programme, the study found.
The phenomenon has also caused concerns among trade unions and at ministerial government level.
swissinfo.ch and agencies/ma