New orders for the Swiss mechanical and electrical engineering industries - the country's largest exporting branch - have fallen by 17.4 per cent in the third quarter.This content was published on November 27, 2001 - 17:28
The industries' umbrella organisation, Swissmem, said on Tuesday that it was only thanks to a "comfortable backlog" of orders that sales and exports had not been affected by the downturn.
The results were released after a survey in which 180 member companies of Swissmem took part.
Commenting on the decline, Swissmem director, Thomas Daum, told swissinfo that the figures said more about the state of the world economy than the position of the MEM industry in Switzerland.
"We have seen a very sharp downturn in the economy in the United States and after that in Europe and Asia. The MEM industry in Switzerland has to bear the consequences of this downturn," Daum said.
He said much of the decline could be blamed on the strength of the Swiss franc in relation to other currencies, particularly the euro. Two-thirds of industry exports go to euroland, in particular Germany.
"I think the figures we've just published don't really show the impact of the strong Swiss franc. That has become more and more serious in the past one or two months and I think that we will feel it very hard if the Swiss franc stays on this [high] level," Daum said.
Swissmem expects to have to make major structural adjustments if the franc remains strong, with the risk of further job cuts.
"At the moment, it's too early to say what the impact of the weakening world economy will be. We just had about 2,000 jobs lost in the past two or three months and we are rather concerned about the months to come," Daum said.
Swissmem sees no prospect of an economic upswing until the second half of 2002 at the earliest.
"It will be difficult at least during the first six or nine months of 2002... For an industry which is first and foremost concerned with investment goods, it is very bad when you have politics or the economy in a state which is not very certain," Daum commented.
Swissmem's quarterly survey said part of the sharp drop in order intake reflected the strength of the corresponding year-earlier period, but noted that cumulative orders for the first nine months of the year were down more than ten per cent.
Domestic orders fell 11.2 per cent during the first nine months of the year, with foreign orders down 9.8 per cent.
Exports to Europe and Asia edged up but those to the United States were down 10.5 per cent as the US slipped into recession.
The single European currency touched an all-time low of SFr1.4391 on September 21 after the US attacks but has since recovered some ground to around SFr1.4650. Economists see a rate of around SFr1.50 as a satisfactory level for exporters.
Swissmem said the attacks on Washington and New York had had little direct impact on its members, but said that it was concerned that it worsened prospects for a rapid US economic recovery.
Reduced business confidence and a decline in investment would impact the industry, it said.
swissinfo with agencies
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