MEM industries: recovery continues :: Swissmem - Switzerland's Work Place and Think Tank

MEM industries: recovery continues

18.05.18

The situation in the Swiss mechanical and electrical engineering industries (MEM industries) improved considerably in the first quarter of 2018. New orders rose by 24.1% and sales by 16.4% compared with the same quarter of the previous year. Goods exports also went up by 4.9%. Companies in the MEM industries are optimistic about the outlook for the rest of 2018.

New orders received by the Swiss mechanical and electrical engineering industries (MEM industries) recorded a significant year-on-year rise in the first quarter of 2018. They went up by 24.1%. In the first quarter of 2018, sales also climbed by 16.4% compared with the prior-year figure. The upward trend in orders and sales is benefiting large companies as well as small and medium-sized firms. The large influx of new orders in recent months is impacting on capacity utilization at factory floor level. According to the Swiss Economic Institute (KOF), the utilization figure stood at 90.6% in the first quarter of 2018 – well above the long-term average of 86.4%. It even hit 91.9% in April. This was the highest level for 10 years.

 

Exports continue to rise

MEM industry goods exports grew 4.9% year-on-year in the first quarter of 2018, to reach CHF 17 billion. Exports to the EU showed the biggest rise, with an increase of 7.4%. Exports to the USA continued to grow (+2.2%). The only decrease was in exports to Asia, which fell by 1.5%. This positive trend covered exports in all the important product groups. Mechanical engineering, the top-selling product group in the MEM industries, recorded a particularly gratifying rise of 5.2%. However, exports of metals (+11.3%), precision instruments (+5.4%) and electronics/electrical engineering products (+3.1%) also went up.

 

Assessment and prospects

Jean-Philippe Kohl, Swissmem Director ad interim, is optimistic about the outlook for the Swiss MEM industries. “The new orders index has remained at a high level since the middle of 2017. Sales and earnings should therefore increase further this year. This is a necessary development in order to make up for the massive decline in margins and the intrinsic depreciation of recent years.” The companies themselves are also optimistic. According to the latest Swissmem survey, 48% of companies are expecting orders from abroad to increase in the next 12 months. Just 12% fear a decline. This optimism is shared by large companies and SMEs alike.

 

The importance of the EU market to the Swiss MEM industries is once again noteworthy. The positive economic situation in the EU is having a very beneficial impact on business for the Swiss MEM companies and is giving a boost to exports. In fact, the EU accounted for 61.5% of their total exports in the first quarter of 2018. The significance of the EU market is not likely to change very much in the medium term. Nevertheless, efforts should be made to tap into the existing potential in other regions. The Mercosur bloc currently presents an opportunity. Its high trade barriers prevent market opportunities being exploited. Swissmem therefore supports the Swiss government’s plans to conclude a free trade agreement with Mercosur.    

 

For further information please contact:

 

Ivo Zimmermann, Head of Communications
Tel. +41 44 384 48 50 / Mobile +41 79 580 04 84
E-mail i.zimmermannanti spam bot@swissmemanti spam bot.ch

Philippe Cordonier, Communications Manager, French-speaking Switzerland
Tel. +41 21 613 35 85 / Mobile +41 79 644 46 77
E-mail p.cordonieranti spam bot@swissmemanti spam bot.ch


Contact

Ivo Zimmermann

Head of Communications

 

Telephone +41 44 384 48 50

Mobile +41 79 580 04 84

i.zimmermannanti spam bot@swissmemanti spam bot.ch