Orders fall as slowdown deepens

Swiss consumers were less confident as was a selection of Swiss business as the economic slowdown hits home Keystone

The global economic slowdown began to strike deep into the Swiss business community over the past week as companies from various sectors forecast a gloomy outlook.

Orders in the third quarter fell by 30 per cent to SFr312.6 million ($191.66 million) and sales declined by 20 per cent to SFr457.4 million, compared with the previous quarter.

Meanwhile, Switzerland’s largest tour operator, Kuoni Travel, reported on Tuesday that it was facing a “tough” time ahead, despite good third-quarter results.

Kuoni said that for the year as a whole, it expected to record annual sales revenues slightly below last year’s figures, with profit expected to amount to around SFr10 million ($6.09 million), down from SFr115.1 in 2000.

Industry affected

In the industrial sector the story was similar as Von Roll said on Wednesday that it also expected to post a negative result for 2001, and anticipated a difficult fourth quarter.

Orders at Von Roll Isola and Von Roll Infratec fell by more than 20 per cent since the terror attacks on the United States in mid-September, the company said.

Von Roll pointed out in its statement that the company was experiencing higher financing costs and negative exchange rate developments.

Von Roll said that in response to the aggravated market situation, it was introducing short-time work in plants in France, Spain and Germany.

Elsewhere, just weeks after the collapse of the Swissair Group, the Belgian national airline Sabena, in which Swissair has a 49.5 per cent stake, finally filed for bankruptcy.

The debt-laden airline filed for bankruptcy on Wednesday, ending a weeks-long battle for survival, and signalling an increasingly bleak outlook for the global aviation industry.

New Crossair head

The Swissair Group’s rescue from financial collapse under regional carrier Crossair was still making headlines this week. The former head of the Dutch national carrier KLM, Pieter Bouw, was elected head of Crossair’s new board of directors, ousting Moritz Suter.

After consulting the major investors, the Piloting Committee charged with launching a new Swiss airline announced they had selected 60-year-old Bouw to become president of the “New Crossair”, the Swiss finance ministry said on Wednesday.

Meanwhile, the Texas company, EDS, took over the activities of the information technology unit of the collapsed Swissair Group, Atraxis.

Atraxis was one of three Swissair subsidiaries, which were in dire financial straits since the collapse of the airline – their main customer – last month.

Under the deal, which was signed on Monday, EDS will handle flight reservations, airport management and information services for Atraxis customers.

Economy slowing

On the economics front the message was clear – the Swiss economy was losing out in response to the global slowdown.

Consumer spending suffered as the growing concern over economic developments undercut private households’ confidence last month.

The confidence index dropped to minus 17 points in October from plus 12 points in July, the steepest drop since the start of the Gulf war 11 years ago, the State Secretariat for Economic Affairs (SECO) said on Thursday.

A decrease in demand for export goods, on which the Swiss economy depends, also unsettled the employment market.

Seco also reported on Thursday that the unemployment rate rose to 1.9 per cent in October from 1.7 per cent in September.

by Tom O’Brien