Swiss firms upbeat despite slower growth

Industry experiencing slowdown in growth Keystone Archive

A UBS quarterly economic survey of industrial companies predicts that domestic output will slow during the first half of the year, but remains confident that the Swiss economy is on a "solid upward path".

The survey by Switzerland’s largest bank, which looks at 300 Swiss companies, showed that during the first quarter of 2001 the pace of economic growth continued to slow.

The report indicated that there was “a slowdown in the growth rate for the first quarter of 2001 to 2.2 per cent over the prior-year period, with a further easing to two per cent expected in the second quarter”.

The report was upbeat about the prospects for Swiss exporters, saying that foreign demand remained strong, and that firms were having difficulty filling export orders.

With many companies facing heavy backlogs, the survey found that more staff were being employed in all but a few sectors compared to last year. The only sectors which did not take on more staff were textiles, clothing, and timber and furniture.

On balance, price increases were reported by 27 per cent of the industrial firms in the survey, although this did not necessarily translate into higher profits.

“Profits… were up at only a net 16 per cent of the firms surveyed,” the report said, citing “higher costs due to increased staff, rising purchasing prices, an unfavourable exchange rate for exports, and the new Federal levy on road hauliers cut into earnings.”

Not all sectors experienced slower growth in the first quarter. The chemical and food industries managed to maintain their upward momentum making them the two strongest performing sectors of Swiss industry.

By contrast, the machinery, electronics, metals and textile industries lost some momentum due to weaker demand from abroad.

swissinfo with agencies