The challenging international market environment did not improve perceptibly for Switzerland's mechanical and electrical engineering industries (MEM industries) during the third quarter of 2009. Both foreign (-26.0%) and domestic (-18.4%) sales were substantially below the previous year’s levels, resulting in a total decline of 24.4%. Although new orders from domestic customers came close to matching 2008 figures (-3.6%), demand from abroad tumbled again (-22.8%).
Both new orders and sales have fallen against year-back levels for the last four consecutive quarters, which has resulted in a correspondingly sharp drop in earnings in a nine-month comparison. On average, foreign and domestic orders in the first nine months of the year were down by 32.4% and 19.5% respectively. This puts them on a similar level to the crisis of 2003. Compared with 2008, sales in the current year are one fifth (-20.8%) lower, the losses being spread roughly equally between the domestic (-17.6%) and foreign (-21.7%) markets.
Decline in exports
The MEM industries’ exports during the first nine months of 2009 declined substantially on previous years. With a total volume of CHF 46.7 billion, they were 23.4% lower than in the same period in 2008, as fewer products were delivered to all regions of the globe. With a 14.9% fall in a nine-month comparison, the Asian markets were slightly less hard-hit by the slump than their European (-26.0%) and US (-22.3%) counterparts.
Developments within the MEM industries were very mixed. While metalworking (-35.9%) and mechanical engineering (27.6%) suffered particularly large decreases in the first nine months of the year, the subsectors of electronics and electrical engineering (-19.2%) and precision instruments (-7.2%) experienced a somewhat more moderate downturn. The rapid changes in the market that occurred at virtually the same time in all global sales regions have resulted in low capacity utilization. At 76.4% in the third quarter of 2009, it was around ten percentage points lower than its long-time average.
At the end of June 2009, the MEM industries employed 338,355 full-time equivalents. Around 17,000 of the approximately 50,000 full-time posts that the industries have created in the last five years have been eliminated.
Market outlook still gloomy
Despite isolated indicators of a global economic recovery, the 290 reporting companies continue to rate the market situation as difficult. A large number of companies (45%) are not expecting the order situation to improve significantly in the next few months and anticipate that it will remain at something like its current level. Although the number of sources that expect a further decline in international demand is down to 17% from 35%, it is assumed that recovery will be only very moderate in most regions.
The Asian markets are regarded as the most likely source of positive stimuli to improve demand. However, in view of private investors’ reticence and the fact that state economic stimulus programmes are coming to an end, the companies in the MEM industries are not anticipating a rapid recovery.
No additional job cuts
Since economic and employment considerations are also a priority, Swissmen is resolutely opposed to the «ban on war material exports» referendum initiative. If the ban were to be approved, the consequences for employment in Switzerland would be devastating. 17,000 jobs have already been lost and the Group for a Switzerland without an Army’s initiative is jeopardizing up to 10,000 more.
Zurich, 11 November 2009
For further information please contact:
Peter Dietrich, CEO of Swissmem
Tel. +41 (0)44 384 42 11, E-mail: p.dietrichnoSpam@swissmem.ch
Ruedi Christen, Head of Communications
Tel. +41 (0)44 384 48 50, mobile: +41 (0)79 317 24 09
E-mail: r.christennoSpam@swissmem.ch