Over the first three quarters of 2015, new orders received by the MEM industries fell by a total of 14.1 percent compared to the previous year. With a decline of 12.8 percent in the third quarter of 2015, the MEM industries have now experienced four successive quarters of declining new orders (Q4 2014: -1.8% / Q1 2015: -17.1% / Q2 2015: -12.3%). As a result, the MEM industries' new orders index sank to its second-lowest level since 2005. Sales also experienced a sharp fall: Over the first three quarters of 2015, these decreased by a total of 7.0 percent (Q1: -8.1% / Q2: -6.2% / Q3: -6.7%) by comparison with the previous year. Generally speaking, SMEs are harder hit by the drop in sales than large companies.
Capacity utilization in the MEM industries remained above the long-term average of 86.3 percent. In the third quarter of 2015, it amounted to 88.3 percent. According to the most recent survey by the Swiss Institute for Business Cycle Research (KOF) in October 2015, capacity utiliza-tion had decreased slightly to 87.5 percent.
Divergent trends in export markets
According to figures from the Swiss Customs Administration, exports by the MEM industries fell by 3.9% in the first nine months of 2015, achieving a merchandise value of CHF 46.8 billion. The drop in exports has accelerated significantly in the course of the year. Whereas losses were only moderate in the first (-1.4%) and sec-ond (-2.9%) quarters of 2015, exports slumped by a hefty 7.3 percent in the third quarter.
Looking at individual product areas, there were significant falls in mechanical engineering (-6.7%), metals (-4.9%) and electrical and electronics (-6.3%). Only precision instruments managed to hold up reasonably well (-0.7%). The export figures for October, which were published yesterday, also reveal a clear drop compared to the same month last year.
Developments in the global markets were uneven. Exports to the EU, by far the most important sales market for the MEM industries, declined by 5.7 percent in the first three quarters of 2015. By contrast, goods exports to Asia rose moderately (+1.6%), while exports to the USA surged impressively (+7.0%). Indeed, the US market is the one beacon of light in the difficult situ-ation currently facing the MEM industries. Firstly, the franc has weakened noticeably against the US dollar, which has strengthened the competitiveness of Swiss exporters. Secondly, the US market has been the most dynamic growth market for the Swiss MEM industries for some time, and now accounts for almost an eighth (12.3%) of all industry exports.
Still no improvement in sight
The latest figures unveiled by the MEM industries testify to the severe consequences of the massive overvaluation of the Swiss franc. In addition to slumps in new orders and sales, this is above all evident in collapsing margins. More than a third of companies are therefore expecting to report an operating loss for 2015. Company owners are also not particularly optimistic when it comes to forecasting future business development: Just 30 percent of companies surveyed anticipate a rise in new orders from abroad over the next 12 months, whereas 26 percent of companies are expecting the order situation to deteriorate further.
The further, massive overvaluation of the franc has triggered accelerated structural change in the MEM industries this year. Many businesses are having to ask themselves which of their industrial activities are still economically viable in Switzerland. Jobs involving a low degree of value creation are increasingly exposed. Accordingly, there have been repeated reports of production relocations and headcount re-ductions throughout the year. According to official federal government statistics, some 4,500 jobs were lost in the MEM industries between January and July 2015. Given the declining order intake and a persistently strong franc, Swissmem is ex-pecting this trend to continue for the time being.
Zurich, 20 November 2015
For further information, please contact:
Ivo Zimmermann, Head of Communications
Phone: +41 (0)44 384 48 50 / mobile: +41 (0)79 580 04 84
E-mail: i.zimmermannnoSpam@swissmem.ch
Philippe Cordonier, Communications Manager, French-speaking Switzerland
Phone: +41 (0)21 613 35 85
Mobile: +41 (0)79 644 46 77
E-mail: p.cordoniernoSpam@swissmem.ch