Dark clouds on the horizon for Swiss industry
Swiss industry is reeling from the slowdown it experienced in the first half of the year.
While the sector’s revenues remained at the level of the first half of 2022 (0.7%), exports fell by 1.1%. New orders fell by 9.6%, leaving little room for optimism in the months ahead, Swissmem reported on Tuesday in an interim report.
The high value of the Swiss franc is penalising Swiss companies internationally, even though the global economic situation has deteriorated. As a result, purchasing managers’ indices (PMI) are at low levels in a number of countries, according to the umbrella organisation, which now includes other sectors such as sensor technology, photonics, robotics, additive manufacturing and industrial IT in addition to the machinery, electrical equipment and metals (MEM industries).
The downward trend intensified in the second half of the year, when orders fell by 14.3% and sales by 3.4%. Large companies were more exposed to the difficulties than small and medium-sized ones, Swissmem points out.
Capacity utilisation stood at 88.2%, which is above the long-term average. This is attributable both to companies’ full order books and to the rise in the number of employees in the sector, which now stands at 329,900.
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Forecasters see little spark from Swiss economy
Disparities between sectors
Among the sectors, exports fell sharply in metals (-9.0%), while they remained at the previous year’s level in precision instruments (-0.4%) and rose in electrical engineering and electronics (1.9%) and in mechanical engineering (1.0%).
The survey of industry leaders reflects this gloomy outlook. Over the next twelve months, 37% of companies expect to see a decline in orders placed from abroad.
But not all sectors are in the same boat. Aviation and environmental and energy technologies, for example, are looking to the future with optimism, while metal, automotive and textile companies are under pressure.
Similarly, some markets are escaping the current slump. For example, exports to India jumped by 11.1% year-on-year in the first half of the year, reaching half a billion Swiss francs.
The next few months will be crucial in determining whether the high level of order books will be enough to see the sector through the current slump, until new orders pick up again.
“However, in view of the weak economic situation, we cannot rule out a significant fall in several key markets”, concluded Stefan Brupbacher, director of Swissmem, quoted in the press release.
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