Swiss tech industry bounces back, but remains fragile

The outlook is mixed for the Swiss tech sector Keystone-SDA

The year got off to a good start for Switzerland's technology industry, with a sharp rebound in new orders and growth in both sales and exports.

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However, this trend is based on “fragile” foundations, and the risks are mounting, warns industry umbrella group Swissmem.

From January to March, new orders rose by 10.1% year-on-year, the association of companies in the machinery, electrical equipment, metals and related technology sectors reported. Revenues rose by 3.4% and exports by 1.1%.

In detail, by market, the European Union was a driving force, with export growth of 3.9%, while Asia (-4.5%) and the United States (-4.2%) experienced a marked decline.

By commodity group, exports of measuring, control and precision instruments (-4.4%) and machinery, mechanical appliances and equipment (-3.9%) declined. Conversely, foreign deliveries of rail, road and air vehicles (+28.4%) soared, thanks to a number of major orders.

Exports totalled CHF17 billion

The capacity utilisation rate for companies reached 81.6%, stabilising at a low level below the long-term average of 85.6%. During the period under review, the technology industry employed 324,200 people, 0.4% more than in the previous quarter.

“The main indicators point to a continuing positive trend, particularly the purchasing managers’ index (PMI), which is showing encouraging signs. Companies are cautiously optimistic, with 36% expecting foreign orders to rise over the next 12 months, while 39% anticipate a stable level of orders,” said Stefan Brupbacher, director of Swissmem.

Swissmem warns, however, that this recovery remains tenuous, since it is based on the industry’s large companies and certain sub-sectors. For example, industrial electrical engineering and energy solutions are benefiting from demand for data centres and AI solutions, as well as in the space sector. Smaller firms, on the other hand, saw their revenues fall by 1.8%.

“It’s a fragile balance. The risk of a fall is considerable”, warned Brupbacher.

Added to this are the risks associated with the outbreak of war in the Middle East and the resulting rise in energy costs and bottlenecks in supply chains, on top of US tariffs and EU trade restrictions.

These factors “could put an end to the positive trend overnight”, Brupbacher fears.

And he calls for favourable framework conditions to be maintained in Switzerland, such as the rapid adoption of the free trade agreement with the Mercosur countries, or the rejection of the “No ten million” initiative advocating immigration controls.

Adapted from French by AI/mga

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