MEM industries: tentative signs of recovery :: Swissmem - Switzerland's Work Place and Think Tank

MEM industries: tentative signs of recovery

19.05.17

The business situation in the Swiss mechanical and electrical engineering industries was positive but less dynamic in the first quarter of 2017. New orders increased by 2.3 percent compared with the same quarter of the previous year. The ostensibly strong 9.5 percent rise in sales is put into perspective by a high baseline. Exports (+3.9%) performed well overall. Many companies in the MEM industries remain under great pressure due to the persistently weak earnings position. Nevertheless, companies’ positive expectations, good economic forecasts in the key sales markets and the recent slight fall in the Swiss franc raise hopes of a longer-term recovery in the MEM industries.

After two difficult years, the situation in the mechanical and electrical engineering industries (MEM industries) has continued to stabilize, but without developing any noticeable momentum. In the first quarter of 2017, new orders rose by 2.3 percent year-on-year, which is primarily due to stronger domestic demand. Sales in the MEM industries increased by 9.5 percent in the first three months compared with the same period last year. However, this strong growth was due in large part to the fact that the prior-year quarter's result had been extremely weak. Capacity utilization in the MEM industries fell below the long-term average (86.4%) to 83.8 percent in the first quarter of 2017. When the Swiss Institute for Business Cycle Research (KOF) carried out its most recent survey in April 2017, it had increased again to 88.0 percent.  

 

Solid increase in goods exports

Goods exports performed well. According to figures from the Swiss Customs Administration, they increased by 3.9% year-on-year in the first quarter of 2017, reaching a merchandise value of CHF 16.2 billion. The biggest rise of all product sectors was seen in metal exports at 13.2 percent, followed by export growth in electrical engineering/electronics (+7.4%), precision instruments (+4.3%) and mechanical engineering (+1.2%). In regional terms, the sales market in the USA showed by far the strongest growth in the first quarter of 2017 (+13.1%). The EU market also put in a pleasing performance with a 4.1 percent rise in exports. The only disappointment was seen in exports to Asia, which fell by −0.6 percent.

 

For Peter Dietrich, CEO of Swissmem, the trend in the Swiss MEM industries is going in the right direction. However, he sees no reason for relief just yet: «The strong rise in sales in the first quarter of 2017 should not hide the fact that the recovery in the MEM industries remains very slow. The unsatisfactory earnings position also shows that many companies are still under a lot of pressure.»

 

Essentially optimistic expectations

With regard to the near future, company owners in the MEM industries are optimistic. In the latest Swissmem survey, 51 percent of the companies who responded are anticipating more new orders from abroad in the coming twelve months. Just 9 percent fear a decline in orders. This means that future expectations have slowly but steadily improved in the past few months. Companies are pinning their hopes on growth stimuli from North America, China and Germany. They are supported by positive economic forecasts in the key sales markets, as well as the recent weakening of the Swiss franc against the euro.

 

 

Attachements:

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For further information please contact:

Ivo Zimmermann, Head of Communications

Tel. +41 44 384 48 50 / Mobile +41 79 580 04 84

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Philippe Cordonier, Communications Manager, French-speaking Switzerland

Tel. +41 21 613 35 85 / Mobile +41 79 644 46 77

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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