Importance of the Swiss financial sector remains high
Published: Thursday, Nov 23rd 2023, 10:10
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The Swiss financial sector is still very important for the Swiss economy and the labor market. In the medium term, however, banks will lose jobs, while insurance companies will create new ones.
In 2022, the gross value added of the financial sector amounted to CHF 101.1 billion, as reported by the economic research institute BAK Economics on Thursday in its annual survey on the importance of the sector. Its share of total Swiss gross value added was therefore 13.3 percent. In addition, almost 450,000 full-time jobs were linked to the financial sector, which corresponds to around 10 percent of all jobs in Switzerland.
The direct value added of the financial sector - not including suppliers or the consumer spending of employees - amounted to around CHF 71 billion. This makes it the third-largest sector in Switzerland after wholesale trade (88.7 billion) and public administration (77.6 billion).
The financial sector also plays an important role when it comes to taxes. According to the study, direct and indirect tax payments will total CHF 18 billion in 2022. This also includes financial market-related taxes such as VAT, withholding tax and stamp duty. This amounts to almost 12% of the total tax revenue of the federal government, cantons and municipalities.
Shrinkage expected in 2023
In their forecast for the current year, the authors of the study anticipate a slight decline in value added in the financial sector. However, a fairly significant decline in the banking sector will be almost offset by a positive development in the insurance sector. A plus of 3.1% is then forecast for the entire sector in 2024.
In the banking sector alone, value added is expected to fall by 3.4 percent this year. According to the analysis, the banks will recover from the slump in 2024 with growth of 4.0 percent.
By contrast, insurance companies are expected to benefit from rising premium volumes in 2023. For the current year, analysts expect value added to increase by 3.3%, with a further increase of 3.0% in 2024.
Job cuts at banks
BAK economists expect a slight increase of 0.7% in the number of employees at banks this year, mainly due to expansion in the IT sector. However, the integration of CS into UBS is expected to have a negative impact from 2024. The number of full-time positions is then expected to fall by 0.8 percent, which is likely to continue in the years 2025 to 2028 with an average decline of 0.6 percent.
The situation looks much better for insurance companies. Here, analysts expect 1.9% more full-time jobs this year and 1.3% in the coming year. From 2025 to 2028, full-time jobs are then expected to increase by an average of 0.6%.
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