Order situation for tech SMEs continues to weaken
Published: Thursday, Nov 23rd 2023, 10:10
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The mood among SMEs in the Swiss mechanical, electrical and metal engineering sector has deteriorated further. High interest rates, the weakening export economy and the uncertain geopolitical situation are affecting companies more than was previously the case.
Three quarters of SMEs from the tech sector rated the business climate as unfavorable in a survey conducted in October, as the umbrella organization Swissmechanic announced on Thursday. The index compiled together with the economic research institute BAK Economics has thus slipped twice in a row for the first time in three years.
The tight order situation in particular is weighing on companies. "Almost one in four companies no longer has enough orders on hand for one month," Swissmechanic Director Jürg Marti is quoted as saying in the press release. Compared to the same quarter of the previous year, almost two thirds of companies reported a decline in incoming orders and only 13% reported an increase.
Hope for relaxation
"The current uncertain geopolitical situation is certainly having a major impact on the low mood," Marti continues. The industry is also experiencing an economic slowdown from key trading partners such as the eurozone, the USA and China. Inflation and the restrictive monetary policy are also making investments more expensive. And the strong franc is weighing on the competitiveness of products and putting pressure on margins.
Nevertheless, SMEs in the tech sector are anticipating a slight easing in the coming year in an economic environment that remains subdued. After all, energy and commodity prices have stabilized and inflationary pressure is easing somewhat both globally and in Switzerland, according to the report. The possible easing of monetary policy by many central banks is likely to stimulate growth, it is hoped.
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