Industry sees first rays of hope in ongoing dry spell
Published: Thursday, Feb 29th 2024, 12:30
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The Swiss tech industry has had a difficult year. However, there are the first rays of hope: the industry association Swissmem hopes that the downturn will bottom out in a few months. And it is making many demands on politicians.
Turnover in the sector fell by 0.8 percent in 2023, exports by 2.6 percent and incoming orders by as much as 8.4 percent, as Swissmem Director Stefan Brupbacher told the media on Thursday. The good order backlog from the previous year would have prevented a more significant slump in sales.
This has apparently not (yet) had a negative impact on industrial companies: according to the association, production capacity utilization at the end of the year was 87.1%, slightly above the long-term average of 86.2%.
At the same time, the number of employees in the tech industry rose by 1.7 percent year-on-year to 326,500, and was only 500 jobs lower than in the previous quarter.
"Companies have not yet responded with short-time working or even redundancies on a large scale," said Brupbacher. "Because they need the good people when things pick up again."
Slump in orders alleviated
This is because the first rays of hope are finally emerging: At minus 3.6%, the decline in incoming orders had clearly weakened in the fourth quarter. In addition, the global purchasing managers' indices are signaling a slightly positive trend at a low level.
The difficult currency situation has also recently eased somewhat. "If this trend continues, the downturn could bottom out in mid-2024," Brupbacher predicted. The association members are expecting growth impetus primarily from India, China, Germany and the USA.
"Does just one swallow herald the arrival of spring?" asked the association director. Only to answer it himself with: "That statement would be premature". "It's important for our companies to persevere now." The order books are still well filled, but they will quickly dwindle.
"The situation is very fragile," warned Martin Hirzel, President of Swissmem, adding that 37% of the companies surveyed still expect orders to fall.
A rucksack of demands
And something else is needed: market access. After all, almost 80 percent of products from the tech industry are exported. Hirzel advocated the rapid conclusion of a free trade agreement with India, for example. But market access to China, Mercosur and other Southeast Asian countries must also be improved.
"If the USA and the EU rely on protectionism and subsidies, this is the pragmatic approach for Switzerland with its small, open economy," said Hirzel with regard to the demand for better market access.
Above all, however, progress in relations with the EU, Switzerland's most important trading partner, was "essential". Swissmem "emphatically" supports the negotiations on Bilaterals III.
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