Swiss engineering sector weathers geopolitical turmoil

Swissmem: cautious optimism amid a fragile recovery Keystone-SDA

Swiss precision and electrical engineering companies continue to show strong resilience despite the war in the Middle East and United States tariffs, according to industry association Swissmem.

“The recovery in the Swiss technology sector is continuing. However, it remains fragile, unevenly distributed and has recently lost momentum,” said Stefan Brupbacher, director of Swissmem.

Business expectations for the next 12 months point to cautious optimism. More than a third anticipate an increase in orders from abroad, whilst 41% expect levels to remain stable.

“Positive signs” are emerging from the Purchasing Managers’ Index, which points to growth in almost all major markets.

However, the Swiss metalworking and electrical engineering association is keen to highlight the many risks facing Swiss companies. Swissmem cites the ongoing war in Iran, rising costs and supply chain difficulties.

US customs duties of 12.5% in force since the end of July, which are 2.5 percentage points higher than those applied to European products, also represent a risk.

Among the members surveyed, 42% of companies are barely managing to cope with this difference, more than a third have had to raise prices for US customers, whilst 17% will have to absorb the additional costs themselves.

Swissmem welcomed the free trade agreement with Mercosur and, more recently, an FTA extension concluded last week with China. This free trade agreement “gives Swiss technology companies better access to the Chinese market”.

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Translated from Italian, reviewed by an English Department journalist.