Swiss industrial recovery falters
One in three Swiss companies believes it will have to make further job cuts, according to a survey published on Monday.
The poll, carried out by financial group UBS, indicates that the economy will remain sluggish.
In its outlook for the fourth quarter, UBS said that after suffering a “severe setback” in the third quarter, industry saw some light at the end of the tunnel.
However, the group said that an early end to “adjustments in headcount” was not in sight as these usually lagged behind the economic cycle.
With the exception of the chemical and pharmaceutical industries, job cuts are planned up until December in all sectors of the economy, it reported.
No boost from exports
The survey indicated that the absence of a boost from exports and weak domestic demand brought the already weak Swiss industrial recovery to a standstill in the summer.
In particular, the watchmaking, machinery, plastics and metal industries suffered a “significant decline” in business activity.
The poll, which covered more than 300 industrial companies, showed that both export and domestic sales were down compared with the same period last year.
Weak demand and high Swiss franc
Export-oriented sectors, in particular, were forced to introduce wide-ranging price cuts in the face of continuing weak demand and the strength of the franc.
As a result, there was no recovery in profitability. Only 20 per cent of companies reported higher earnings, while 46 per cent suffered a fall.
UBS said that although industrial output was likely to remain weak in the short term due to weak orders and the low level of order backlogs, industry was more optimistic for the fourth quarter.
Overall, companies now reckon that while orders from abroad will stagnate, domestic orders will fall significantly less than they did in recent months.
It added that despite the more upbeat outlook for the fourth quarter, food, textiles, chemicals and pharmaceuticals were the only sectors anticipating positive growth rates in incoming orders, production and sales.
swissinfo with agencies
Weak exports and domestic demand brought the economy to a standstill in the summer.
Watchmaking, machinery, plastics and metal industries were worst hit.
All sectors, bar pharmaceuticals and chemicals, are planning job cuts.
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