Swiss economy slowing

Job losses at Feldsclösschen are part of the gloomier economic trend Keystone

The Swiss business scene was confronted over the past week with a raft of news regarding the slowdown in the domestic economy. Consumer confidence fell while unemployment rose and more job losses were announced at the country's biggest drinks group.

On Thursday the beverages group, Feldschlösschen, announced it was to cut 150 jobs by early next year as part of a major restructuring programme. A company statement said the cuts would mainly affect managerial positions.

This news followed on from unemployment figures for July released on Wednesday. In another sign that the country’s economic fortunes were being hit by the economic downturn, the unemployment rate edged up in July to 1.7 per cent. The number of jobless stood at 60,166.

Although the unemployment rate is still historically low, the upwards movement will worry politicians and economists at a time when several companies have announced profit warnings and job cuts.

Adding to the economic was gloom was the most recent consumer confidence data released on Tuesday. It deteriorated in July as the impact of the economic slowdown continued to affect people’s plans.

The State Secretariat for Economic Affairs (SECO) said its regular survey of 1,100 households showed its index fell to 12 points from 21 points in April.

The fall was sharper than economists had expected and was a further sign that Switzerland’s economic situation is worsening. Although the country is still far from entering a recession, growth is quickly falling from last year’s robust 3.4 per cent.

Meanwhile news came in earlier in the week that Switzerland’s trade with Argentina had dropped sharply as a result of the deepening recession in the Latin American country.

In the first six months of 2001, Swiss exports amounted to SFr185 million – an 11 per cent drop compared with the same period of 2000.

On the corporate front the Belgian airline Sabena, in which the Swissair Group has an almost 50 per cent stake, announced it will cut 1,600 jobs or 12 per cent of its workforce as part of a plan to rescue the ailing carrier.

In a statement from Brussels on Thursday, Sabena said it would also sell off its catering, cargo handling and maintenance activities, slim down its aircraft fleet and cancel eight routes.

The announcement followed a second day during which the airline had to cancel many European flights as workers went on strike in protest at the threat of job losses, causing travel chaos.

by Tom O’Brien