Tough first quarter for machinery sector
New orders in the mechanical and electrical engineering industry plummeted by almost a quarter in the first three months of 2002.
The industry, which makes up Switzerland’s largest export sector, is blaming the results on the strong Swiss franc and the global economic downturn.
The industry’s umbrella association, Swissmem, said the mechanical and electrical engineering (MEM) sector saw foreign orders drop by 17.2 per cent while domestic orders fell more than twice that by 34 per cent in the fourth consecutive quarterly decline.
Sales slipped by 15 per cent in the first quarter, compared with the same period last year, pulled down by declining orders.
Exporters say the strength of the franc is eroding their competitiveness, with the Swiss currency trading at eight-month highs against the dollar and gaining ground against the euro. A euro currently buys SFr1.45, which is well above the SFr1.50 level favoured by Swiss exporters.
Plummeting sales in Germany
Swissmem’s quarterly survey of its 250 member companies found that exports fell 15 percent to SFr12.9 billion ($8.2 billion), with plummeting sales to Germany, Swiss MEM industries’ most important market, weighing heavily on the sector.
The industry is also operating well below capacity, operating at 81.5 per cent, a drop of 8.6 per cent compared with the first quarter 2001.
The director of Swissmem, Thomas Daum, said firms expect a modest recovery towards the end of the year.
“We are hoping for an upturn in the last quarter, when we hope the franc will no longer be as strong as it is now because this would be a severe handicap to our development.”
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