Switzerland: Pessimism of SMEs in the machinery industry – Economy

SMEs in the MEM branch (Swiss machinery, electrical equipment and metals industry) are still pessimistic at the start of 2020, but not as much as in October 2019. The environment remains difficult, according to the Swissmechanic barometer, but the resumption of investment in capital goods in Switzerland represents a ray of hope.

“Next to the Swiss franc, the low order intake is currently the biggest challenge,” said Jürg Marti, director of Swissmechanic, quoted in the statement released on Thursday. Thus, 62% of companies reported a drop in orders in the fourth quarter of 2019 and only 15% an increase, according to the business climate index for SME MEMS.

“This development results in a drop in turnover and margins”. “Staff changes” are also more widely considered. For the first quarter of 2020, more companies expecting a decline (42%) than those expecting an improvement (11%), but the gap has narrowed. The almost majority count on a status quo.

Uncertainties abroad

The economic situation in the Swiss machinery industry is mainly clouded by political uncertainties abroad. In addition, the weakness of the main market that is the European Union and the strength of the franc aggravate the situation. Swissmechanic therefore requests the Swiss National Bank (SNB) to ensure that the currency “weakens” in order to “strengthen the national economy”.

The press release quotes the BAK Economics institute, which expects for 2020/2021 an acceleration of the business of the MEM branch in Switzerland and a resumption of foreign demand for 2021 at the latest.

In Switzerland, Swissmechanic is counting on a resumption of investment in capital goods from 2020, “given that with the adoption of the tax reform and AVS financing (RFFA) a major factor of uncertainty has disappeared” . Concerning foreign countries, the easing in the US / China trade conflict and Brexit should be confirmed.

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The Swissmechanic association brings together 1,400 companies with more than 70,000 employees for an annual turnover of around 15 billion francs. (Ps / nxp)

Created: 20.02.2020, 12h25

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