Swiss industry is in a far more sluggish state than many observers had thought, according to the latest UBS company survey.
It revealed that, in all but one sector, business in the second quarter was worse than companies forecast three months ago, although a slight improvement is expected for the current quarter.
The report from Switzerland's biggest bank found that the pace of industrial growth slowed sharply in the second quarter.
The business cycle indicator, the trend barometer for gross domestic product (GDP), indicated a sharp drop in the growth rate to 1.3 per cent for the second quarter of 2001.
Although the expectations of the survey participants for the third quarter were slightly more optimistic, the indicator, which is based largely on actual results, points to a continued slowdown in the short term.
"Swiss exports in particular were off sharply, which caught companies off guard," said the report. "Hopes for a more robust trend in domestic demand were also not fulfilled. On balance, only two per cent of survey participants reported that overall orders received were higher in the second quarter than in the prior year; in March, a net 28 per cent of companies expected a positive trend."
The trend for the third quarter, according to UBS, is expected to be somewhat better for both domestic and foreign orders. Indeed, 35 per cent of the firms participating in the survey forecast the volume of output to increase, while only 19 per cent predicted a fall.
Even though most sectors succeeded in pushing through modest increases in prices, only food and watchmaking posted further earnings gains. For the majority, earnings were either stable or even down slightly due to rising expenses for staff and capital spending as well as higher purchase prices.
The quarterly survey of around 350 industrial companies has been conducted since 1975.
swissinfo with agencies