Surveys: strong franc hurts Swiss SMEs
The strong franc continues to hurt small and medium-sized Swiss firms. A new survey says 2,000 jobs have been lost in the machine industry since January, while another claims one in three firms is considering moving activities abroad.
“For many small and medium-sized firms (SMEs), the lemon has already been totally squeezed,” said Oliver Müller, director of SwissmechanicExternal link, the association which represents 1,400 machine, electronic and metallurgy SMEs, which export 85% of their products and services.
Four out of ten firms surveyed by Swissmechanic in a report published on Friday say they are happy with their turnover.
“But 16% of firms have laid off workers. We estimate these measures have cost 2,000 jobs among our members,” said Müller.
The Swiss National Bank (SNB) abruptly abandoned a CHF1.20 per euro cap on January 15, sending the currency soaring and raising concerns about Switzerland’s export-reliant economy. On Friday it stood at CHF1.03 to the euro.
Firms have tried to adapt by increasing working hours, introducing short-time employment, optimising production processes and moving certain activities abroad.
Some 15% of firms have increased hours and 4% have reduced wages, said Müller.
Considering moving abroad
A separate survey of 86 SMEs published on Friday claimed that one-third of firms questioned were considering moving some activities abroad due to strong franc pressures. Two-thirds had adapted their prices and 57% had changed suppliers.
“The Swiss franc is significantly overvalued overall,” said SNB President Thomas Jordan at the bank’s general meeting in Bern on Friday. “A correction of this overvaluation is to be expected over time.”
Jordan said the Swiss economy would probably overcome its current challenges.
“If the global economy recovers further and growth in the euro area increases again more robustly, this unsatisfactory situation will change as well,” he said.
The SNB foresees an inflation rate of minus 1.1% for 2015. It predicts growth of “just under” 1% for this year.
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