Stunned by the ‘shock’ of the strong franc, Swiss companies are planning further job cuts, a leading business institute reports.
According to a survey published by the Swiss Economic Instituteexternal link (KOF) at the federal technology institute ETH Zurich on Monday, Swiss businesses are planning to “cut rather than create” jobs in the near future.
“The Swiss labour market has yet to recover from the franc shock,” the institute said in a statement.
In January, the Swiss National Bank (SNB) abandoned its cap on the franc at CHF1.20 per euro – sending shockwaves through Switzerland’s export-driven economy. One franc is currently worth €1.08.
The KOF report said the strong franc was still affecting most industries, in particular the manufacturing and the hotel and catering industries. Employment prospects are also gloomy in the banking and insurance sectors, but have stabilised in the wholesale and retail trades, it went on.
Last week the consultancy firm Deloitte released a survey with 110 Swiss chief financial officers (CFOs) indicating a slightly more stable business outlook.
More than a third (37%) of the CFOs surveyed still considered the economic outlook for the next 12 months to be negative. But, fewer were pessimistic than the previous quarter (41%). It said Swiss businesses appeared to have accepted the new reality and to have gradually adjusted to the exchange rate appreciation. A quarter of those questioned expect a recession in the next two years.
The NZZ am Sonntag Sunday newspaper reported yesterday that at least 70 Swiss manufacturers from the machinery, electrical and metal industries had increased staff working hours - some up to the legal maximum of 45 hours - this year as a way of compensating for the stronger franc. The typical working week at Swiss firms is around 40 hours.
swissinfo.ch with agencies