Businesses hurting under rising franc

The strong Swiss franc continues to be problematic for the economy, according a survey by the Swiss National Bank.

In the fourth quarter of 2010, 45 per cent of 244 businesses surveyed said they had been impacted negatively by the strength of the currency, compared with 28 per cent in the previous quarter.

Another 42 per cent said there was no change to their business and 13 per cent said it had a positive effect.

The central bank said the rising franc had a different impact on the various sectors and industries. Most affected was manufacturing, while the fall-out was least felt in the service industry.

In recent weeks the franc has traded at SFr1.30 or below against the euro and has been worth more than the dollar since the start of September.

The Swiss National Bank report published on Friday noted that the economy “remained on a strong growth path” in the third quarter of 2010. But this was expected to be significantly lower in the quarters ahead due to more subdued economic activity in industrialised countries and the appreciation of the Swiss franc.

As a result, the central bank expects GDP to grow by around 1.5 per cent in 2011, following growth of around 2.5 per cent in the current year.