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Swiss engineering industry suffers declining orders

Schneider-Ammann (right) has complained of slow progress of liberalisation in the electricity market

(Keystone Archive)

Switzerland's mechanical and electrical engineering industries -- the country's largest exporter -- have been hit hard by the slowdown of the United States and European economies. Incoming orders during the first six months dropped by 6.7 per cent compared with the same period last year.

The industries' umbrella organisation, SWISSMEM, said that while orders for this year's first quarter had shown an "excellent" 10 per cent increase, the second quarter recorded a drop of 20.4 per cent.

SWISSMEM said at a news conference in Bern on Tuesday that thanks to a reserve of existing orders, turnover for the first six months rose by one per cent. Exports totalled SFr29.9 billion, which represents an increase of 5.2 per cent over the comparable period last year.

The organisation's director, Thomas Daum said that business in the engineering branch during the first six months had been "rather disappointing."

"Although a slowdown in growth was foreseeable, incoming orders in particular recorded a much more pronounced drop than we had thought," he said.

Growth forecast "optimistic"

Daum said SWISSMEM's forecast at the beginning of the year of a sales growth of between three and five per cent had been "too optimistic".

"This is mainly due to the fact that the slowdown in growth of the US economy in the past months has also affected European economies, in particular Germany," he said. Germany is Swiss industry's main market.

"For the time being, there are no signs of alarm but we hope that the decrease in incoming orders doesn't continue in the same way," he added.

Daum told swissinfo that it was very difficult to forecast what would happen for the year as a whole. "If we land at the same level of turnover as we had last year, then we could say this is a more or less lucky development," he said.

Commenting on the current Swiss political background, SWISSMEM's president, Johann Schneider-Ammann, complained of the slow progress of liberalisation in the electricity market.

He said that while many of the electricity markets in the European Union were open to competition, liberalisation in Switzerland may only be realized in 2007.

"The victims of this state of affairs are Swiss companies, in particular the small and medium-sized enterprises, which already have considerable disadvantages compared with their foreign counterparts. The competition abroad can buy its electricity up to 40 per cent cheaper than here," he said.

by Robert Brookes

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