MEM industries: Strong upturn in sales and orders, but earnings situation still unsatisfactory

The situation in the Swiss mechanical and electrical engineering industries (MEM industries) is better than it has been for a long time. Sales in 2017 were up 9.4 percent on the year-back figure. New orders and exports rose by 7.5 and 5.5 percent respectively compared to 2016. The only fly in the ointment is the earnings situation, which 44 percent of companies making up the MEM industries still report to be unsatisfactory. These companies now need a protracted period of growth with significantly improved margins so that they can compensate for the margin and asset erosion of recent years, which in some cases was very substantial. Nevertheless, companies’ expectations, the improved Swiss franc-euro exchange rate and the good economic climate in key markets all suggest that business will continue to grow in 2018.