As the development of the MEM industries in the first half of 2013 shows, the sector remains under considerable pressure. In the second quarter of 2013, the industries sustained a 4.3% year-on-year decline in new orders (for 1H 2012 as a whole: -2.5%). Sales may have grown slightly in Q2 2013 (+1.3%), but they were down 1.3% over the first half of 2013 as a whole. Large companies and SMEs are equally affected by this trend. The export figures also form part of this less than cheery picture: goods exports from the MEM industries fell by 1.5% in the first half of the year, and trends in the markets were mixed. Exports to Asia and Europe were down 3.6% and 0.9% respectively; however, exports to the US were up 1.7%. Capacity utilization in the industries remained low at 82.8% in Q2 2013, barely changing compared to the previous quarter (Q1 2013: 82.2%) and reflecting the persistently weak order books. According to the latest figures published by the KOF, the utilization rate was 82.1% in July, which is well below the long-term average of 86.1%.
A look at the long-term course of the order and sales indices reveals that the MEM industries have been stagnant since 2009 owing to the strength of the franc and a sluggish business climate in the chief markets. Nevertheless, that should not shroud the fact that over the last two years enormous efforts have been made by companies at operational level in order to remain internationally competitive. An upturn, however, has yet to materialize.
Trend reversal hoped for in second half of year
Despite the persisting difficulties of the MEM industries, there are signs that some cautious optimism may be warranted. It is conspicuous that companies in this sector are sticking to their fundamentally positive assessment of the future. At the end of 2012 and in spring of this year, the proportion of companies that were upbeat about the future trend in orders was 42% and 40% respectively. And again, in the second quarter of 2013, this figure was almost 40%. At the opposite end of the scale, just under 12% of the companies surveyed expect the order situation to worsen over the next twelve months. Turnaround hopes are also being fuelled by a relatively healthy order inflow for MEM industry subsectors that are typically early-cycle (e.g. textile machinery).
In July 2013, the PMI, which is an important indicator for the future performance of the industries, reached its highest level since May 2011: 57.4 points. This figure is well above the growth threshold. Furthermore, in Q2 2013, the EU reported moderate growth for the first time in one and a half years. Accounting for 60% of exports, the EU is by far the biggest market for the Swiss MEM industries. An economic recovery in the EU would provide the eagerly awaited growth stimuli for the Swiss MEM sector, which is heavily export-driven.
During the testing current times, the industries need more than just good operating structures to have a chance on the international market. Regrettably, various organizations are attempting to destroy these structures with a series of political initiatives (e.g. the minimum wage, «1:12», inheritance tax, ECOPOP and mass immigration initiatives). The first key decision will be made on 24 November 2013, when the Swiss electorate will vote on the
Young Socialists’ «1:12» initiative. A «yes» vote would result in entrepreneurial freedom of action being massively restricted. In a survey of Swissmem member companies, 91% rejected the «1:12» initiative – although 82% of the respondents would not be affected directly if the initiative were approved. These companies oppose the initiative as they do not want wages to be dictated by the state (88% of those surveyed) and fear high administrative costs (81% of those surveyed). Swissmem will campaign vigorously against these initiatives, which threaten to damage Switzerland’s successful model in a short-sighted and utterly reckless manner.
For further information please contact:
Ivo Zimmermann, Head of Communications
Tel.: +41 44 384 48 50 / mobile: +41 79 580 04 84
Philippe Cordonier, Head of French-speaking Switzerland
Tel.: +41 21 613 35 85 / mobile: +41 79 644 46 77