Swiss business group expects export slump after strong start to year

Economiesuisse expects export slump after strong start to the year Keystone-SDA

The Swiss economy was still robust in the first quarter of 2025 but is coming under increasing pressure. Some companies are experiencing a dramatic drop in their labour supply, the Swiss business federation, economiesuisse, said on Tuesday.

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According to economiesuisse, real gross domestic product (GDP) is only expected to grow by 1.1% in the current year, compared to 1.4% in the previous year. Economiesuisse is therefore now significantly more pessimistic than in its last forecast in December.

Growth is also forecast to remain below long-term potential in 2026 at 1.4%, according to the report. The main reason for this is the ongoing global uncertainty, which is weighing on investments and exports.

Export-oriented industries such as machinery, watchmaking and consumer goods manufacturers are particularly affected. Global demand is weakening – in the US, Europe and China. While the service sector is proving to be more stable, the picture in the manufacturing industry continues to cloud over, the report said. Although the strong first quarter is supporting the annual balance sheet, a decline is to be expected as the year progresses, according to economiesuisse.

Customers are cancelling orders or postponing purchases of machinery and equipment. “This is having a direct impact on the order situation of Swiss companies, which is causing their labour supply to drop dramatically in some cases,” the association said.

The domestic economy should develop more solidly. Private consumption is benefiting from low inflation and rising real wages. Economiesuisse expects an inflation rate of 0.3% in 2025, rising slightly to 0.8% in 2026. Low inflation should also push short-term interest rates to zero.

+ UBS economists more confident about Swiss economy in 2025

More short-time work

The slowdown is also likely to be reflected in the labour market. According to Economiesuisse estimates, the unemployment rate will rise to 3% in 2025 and 3.1% in 2026. At the same time, the number of people on short-time work will increase noticeably – a sign of the growing pressure on companies to adapt.

The outlook remains uncertain in light of geopolitical tensions and erratic US trade policy. In the baseline scenario, economiesuisse expects an additional US tariff rate of 10% and no escalation. However, there is a risk of further setbacks if trade conflicts intensify.

+ Switzerland and US agree to accelerate tariff talks

Translated from German by DeepL/ts

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