Tech industry faces increasingly tough headwinds
Published: Thursday, Nov 16th 2023, 09:41
Updated At: Thursday, Nov 16th 2023, 09:43
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The situation in the Swiss tech industry is becoming increasingly dire. While new orders were increasingly scarce in the third quarter, exports of goods and sales are also falling.
The downturn that began in the first half of 2023 worsened in the third quarter, Swissmem explained in a communiqué on business performance on Thursday. "The industrial recession has reached the tech industry", summarized the umbrella organization.
From July to September, incoming orders fell by 10.5% compared to the same quarter of the previous year. Over the first nine months as a whole, orders fell by 9.9%.
The negative trend was also reflected in sales in the third quarter. They fell by 1.5% compared to the previous year. From January to September, sales stagnated overall (-0.1%).
Exports of goods by the Swiss tech industry fell by 2.5% in the first nine months of 2023. According to Swissmem, they still reached a value of 52.7 billion Swiss francs. In the third quarter of 2023 alone, the decline in goods exports amounted to 5.5%.
India the only ray of hope
According to Swissmem, all important sales markets developed negatively. Exports to the USA fell by 4.6%, to Asia by 4.3% and to the EU by 1.8%.
The only ray of hope is India - this sales market has been growing continuously since 2021. Exports of goods to India increased by 9.8% in the first nine months of 2023.
In the most important product groups, exports of metals fell by 9.6%, precision instruments by 2.5% and mechanical engineering by 0.5%. Only electrical engineering/electronics recorded slight export growth of 1.5 percent.
Bleak prospects
And according to Swissmem, the downturn in the Swiss tech industry is likely to continue in the coming months. On the one hand, this is indicated by the purchasing managers' indices, some of which are very low worldwide.
However, in the most recent survey of association members, entrepreneurs were also much more pessimistic than at the beginning of the year. A new 37% expect fewer orders from abroad in the coming twelve months. At the beginning of the year, only 28 percent made this assessment.
"The tech industry is experiencing a cyclical downturn," Swissmem noted. In such recessionary phases, good framework conditions are "even more important than usual."
No additional burdens should therefore be placed on companies. In the interests of jobs, restraint is also needed when it comes to wage demands.
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