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Companies see light at end of tunnel

The Swiss luxury goods sector expects further growth

(Keystone)

Many Swiss firms are still confident of posting further growth in 2009 while most expect the worst of the global economic downturn to be over by next autumn.

The findings of the Swiss Business Federation (economiesuisse) survey painted a relatively optimistic picture despite economists at the lobby group predicting zero growth for the country next year.

Economiesuisse also expects the rate of unemployment to climb to 3.2 per cent in 2009 from 2.5 per cent this year. But the federation told a conference in Zurich on Wednesday that the economy would be cushioned by interest rate cuts boosting consumer spending power.

The federation even picked out some bright spots in the beleaguered export industry that has been pounded by the recent strengthening of the Swiss franc.

Chief economist Rudolf Minsch forecast hard times for the textile and machinery sectors but continued (albeit reduced) growth for the food, precision instruments, watches and luxury goods branches.

"We will see both positive and negative aspects in the export and domestic industries over the next year," Minsch told swissinfo. "The growth rates of the past are over but there are several branches of industry that are looking forward to positive growth expectations for 2009."

Beating EU

Even the most pessimistic member firms believe that the United States economy will start to recover by September followed by the Swiss market at the end of 2009. The average predictions brought the dates forward to July in the US and October in Switzerland.

"Business leaders are convinced that the US stabilisation programmes will result in positive growth rates in the second half of 2009," said Minsch.

Company executives also believe that Switzerland will recover faster than the European Union.

This relative optimism compared to neighbouring countries was based on a stable property market and the fact that Swiss firms traditionally use less credit to finance their operations, Minsch added.

However, economiesuisse director Pascal Gentinetta warned that the economy faced more threats than just the contraction of the export industry.

"Nearly as bad as this problem, is a loss of confidence by many people in the economy. This is not just a homemade Swiss phenomenon, but one that is being faced by all industrialised nations," he told the conference.

Reform fears

Federation president Gerold Bührer repeated earlier fears that this loss of trust, caused primarily by costly mistakes in the financial industry, could inhibit measures to liberalise the Swiss economy.

He was particularly concerned that economic reforms could be brought to a halt by overbearing state interference or by the Swiss people voting down measures to free up markets.

Bührer re-emphasised the desire of the business community that a series of ongoing liberalisation packages should continue in 2009.

These included the successful conclusion of World Trade Organisation talks, continued negotiations with the EU on agricultural and energy reforms, liberalisation of the domestic post and energy markets and the pursuit of free trade agreements with selected countries.

swissinfo, Matthew Allen in Zurich

GDP forecasts 2009

Economiesuisse 0%
BAK Basel Economics: 0.7%
KOF Business Institute: 0.3%
Credit Suisse: 1%
UBS: 0.2%

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Economiesuisse

The Swiss Business Federation was created through the merger in 2000 of the Swiss Federation of Trade and Industry and the Society for the Promotion of the Swiss Economy.

Its members include 100 trade and industry associations, 20 cantonal chambers of commerce and individual companies in the financial, manufacturing, advertising, media, construction, engineering, chemicals, pharmaceutical, technology, media and tourism sectors.

It also represents the interests of many small and medium-sized enterprises and works together with the Swiss Employers Association.

The umbrella organisation also has the support of around 30,000 companies, employing 1.5 million people in Switzerland.

It plays an important role in the Swiss economy by representing the views of its members to the government and to the public.

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