Despite a recent rash of job cuts at prominent Swiss firms, unemployment levels are expected to hold more or less steady, remaining well below the European average.This content was published on November 2, 2011 - 20:51
But economists are convinced that the Swiss economy will suffer a downturn from the end of this year lasting well into 2012, possibly even resulting in a recession.
Drugs company Novartis last month announced plans to shed 1,100 jobs in Switzerland while a number of other firms have blamed the strong Swiss franc for forcing them to move Swiss-based jobs abroad this year.
The two biggest banks, UBS and Credit Suisse, have also announced massive job cuts, although in their case most of these positions will be lost abroad.
The umbrella group for the Swiss electrical and machinery industry, Swissmem, has recently warned that the strong franc’s adverse impact on exports could see 10,000 jobs being lost – representing some three per cent of the sector’s workforce.
The worst case forecasts for unemployment show the rate rising from the 2.8 per cent registered last September to 3.5 per cent by the middle of next year.
But some commentators point out that official statistics alone do not tell the whole story.
The Swiss rate of unemployment – that has hovered just above three per cent for the year so far – cannot in fact be compared to European Union figures that show a 9.7 per cent rate for the zone, according to Daniel Lampart, chief economist of the Swiss Trade Union Federation.
The long-term unemployed in Switzerland cease to be counted in official figures after less than two years out of work, which is not the case with EU data, he explained.
“If the Swiss and European statistics were to be harmonised, they would show Switzerland’s unemployment rate to be around four per cent,” he told swissinfo.ch.
While Lampart acknowledged that the Swiss labour market is still more robust than many of its European neighbours, he also warned that the trend is getting worse.
“In the 1980s, the rate of unemployment in Switzerland was less than one per cent,” he told swissinfo.ch.
“Switzerland is in danger of going in the same direction as Austria, the Netherlands and Denmark that have all seen a worsening of the labour situation compared to historical trends.”
The Trade Union Federation has called on the Swiss National Bank to set the minimum exchange rate of the franc against the euro at SFr1.40 at least, rather than the current SFr1.20, to provide an effective cushion for the export and tourism industries.
Novartis partly blamed the strong franc for its recent decision to shed Swiss jobs. Peter Huntsman, president and chief executive of the Huntsman chemical group, also said the franc was the reason behind the company’s decision to transfer 100 Basel-based jobs to other markets.
“The recent strengthening of the Swiss franc has greatly impacted our cost structure in Switzerland, which just serves to reinforce the need for re-alignment,” he said on announcing the job cuts in September.
Other companies have voiced concern over the weakening of the EU economy that represents the market for two thirds of all Swiss exports.
Media group Kudelski called for tax breaks on research and development as it slashed 90 Swiss jobs on Tuesday.
Recession short lived
Other firms, such as scent and flavour specialists Givaudan, decided to move Swiss-based jobs abroad to be closer to developing economies that represent greater sales growth for the company.
Switzerland is almost certainly headed for a recession, according to Bank Sarasin economist Ursina Kubli. Swiss manufacturers have recently indicated dangerously low levels of new orders, while the latest confusing signals from Greece threaten to scupper plans to save the country from bankruptcy.
But Kubli expects negative Swiss GDP (gross domestic product) growth to last just a few months and begin recovering from the middle of next year.
“Our optimism is driven by the monetary policies of many countries that will boost economic growth,” Kubli told swissinfo.ch.
When growth picks up again – as expected – manufacturers will again increase output, thus saving jobs, she argued.
Switzerland’s unemployment rate of 2.8% is one of the best in the world. The mean monthly rate so far this year stands at 3.1% - compared to 3.9% in 2010.
Some 111,344 people were registered as unemployed in September, according to Seco.
That is 28,696, or 20.5%, fewer than the same month last year.
Some 17,932 young people (aged 15-24) were out of work in September, a quarter fewer than a year ago.
Seco reported 19,435 open job positions in the Swiss market, up 851 posts from last month.
Several major firms have announced job cuts this year, led by the two big banks UBS and Credit Suisse.
Some 400 UBS positions will be lost in Switzerland as the bank cuts its workforce by 3,500. Credit Suisse did not specify how many of its 3,500 job losses will take place in Switzerland, but most posts are expected to be culled in the US and Britain.
Drugs maker Novartis will shed 1,100 Swiss jobs amongst its 2,000 worldwide cuts. Last year, Roche said 770 positions would be lost in Switzerland out of a total of 4,800.
Media firm Kudelski will cut 270 global jobs – 90 in Switzerland.
Electrical parts manufacturer Huber + Suhner will move 80 Swiss-based jobs to Tunisia and Poland.
Chemical maker Hunstman has said it will transfer some 100 Basel-based jobs to “key markets”.End of insertion
European unemployment rates
More than 16 million people were unemployed in the 27 EU member states in September, according to official figures.
Some 174,000 more people were without jobs compared to August. That corresponds to an average rate of 9.7% in September compared to 9.6% the previous month.
Spain has the worst unemployment rate of 22.6% with Austria has the best, at 3.9%.
Some 5.9% of the workforce is unemployed in Germany, 8.1% in Britain, 9.9% in France and 17.6% in Greece.End of insertion
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