Downturn in tech industry continues
Published: Tuesday, Nov 19th 2024, 10:30
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The situation in the Swiss tech industry remains tense. The decline in sales continued in the third quarter and, according to the industry association Swissmem, the most important indicators do not point to an imminent recovery.
In the third quarter of 2024, turnover in the tech industry (mechanical and electrical engineering, metals and related technology industries) fell by a further 2.4% compared to the same period of the previous year, according to a press release issued on Tuesday. This brings the decline in turnover in the first nine months to 4.2%.
Incoming orders rose by 6.7% in the third quarter. However, according to Swissmem, this growth is merely a base effect, as the same quarter of the previous year was extremely poor. In the first nine months of the year, there was therefore an overall decline in incoming orders of 0.3 percent.
Problem child Germany
Exports of goods by the tech industry fell by 2.5% in the third quarter, and over all three quarters of this year, exports fell by 3.6% year-on-year to CHF 50.8 billion. Germany is a major cause for concern: exports to the Swiss tech industry's largest sales market fell by 8.4% in the first nine months.
However, exports of goods to Italy (-7.2%), Austria (-5.0%) and France (-1.1%) also declined. In contrast, exports of goods to the USA (+3.1%) and Asia (+0.6%) rose in the first nine months. India remained the most dynamic sales market: export volumes rose by 11.0%, with growth accelerating in the third quarter (+22.4%).
However, this could not compensate for the weakness of the other markets, according to Swissmem. The Swiss tech industry is under pressure due to the economic weakness of the EU and Germany in particular. However, domestic demand is also weak. Accordingly, the mood in companies has deteriorated significantly in recent months, as the latest survey of Swissmem member companies shows.
Short-time work and downsizing expected
The difficult situation is also threatening to affect employment in the tech industry. So far, only a few companies have cut jobs because they wanted to keep their skilled workers, said Swissmem Director Stefan Brupbacher in a statement. "However, I fear that there will now be an increase in short-time working and redundancies," said Brupbacher.
In the "best case scenario", a stabilization can be expected next year. "However, should a 'trade war' break out between the US, China and the EU, this would further drag down the Swiss tech industry, which exports 80% of its products."
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