Swiss industry is optimistic about future earnings having turned a corner in the second quarter of 2002, according to a new survey by banking group UBS.

A survey of 300 companies, conducted in June, showed most firms expect to increase production in the coming months after having scaled back their activities in the first and second quarters.

Pharmaceuticals, watchmaking and paper moved back into positive growth in the second quarter 2002 rejoining the food sector - the only one which has not seen a drop in sales in the past year.

Other sectors such as textiles, timber and capital goods were stuck in cyclical depression, although the low point seemed to have passed, the survey found.

The third quarter is forecast to be much better for all sectors except paper and watchmaking. This year's second quarter saw 12 per cent of firms reporting a decrease in sales, compared to 36 per cent in the first quarter.

Most companies said they are hoping for a recovery in sales and better earnings, but downward pressures on prices could stand in their way.

Headcount

Since the upturn is only in its initial phase, firms are not expected to be hiring in the coming months. In fact, one out of nine firms said they planned to cut staff between July and September.

In the second quarter, 22 per cent of companies said they had reduced staff numbers - slightly fewer than in the previous quarter.

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