The course of business of the Swiss machinery, electro and metal Industry (MEM-Industry) has in the last year developed very favourable. In comparison to 2020 order intake was increasing 26.5 %, turnovers by 10.4 % and Exports by 12.7 %. Without the difficulties of the supply chains turnovers and exports would have been even better. The level of the Purchase Manager Index (PMI in the most important countries, as well as the estimates of companies of the MEM segment are pointing in th3e direction of further growth during 2022.
The war in the Ukraine is leading to new uncertainties that could hurt such a trend for the investment goods. In addition, the conflict could accelerate the escape to the CHF, thus leading to marked increasing value of the Swiss Franc against the EUR. Also the missing association of Switzerland to the EU Research Funding Programme “Horizon Europe” could on the medium term harm the innovation power of the Swiss Industry. Swissmem requests from the Federal Councillors to undertake all necessary steps that the association of Switzerland will take place during 2022. The planned steps to stabilise the bilateral path is welcomed by Swissmem.
After the negative effect of the pandemic in 2020 the Swiss MEM Industry showed a steep swing-up for 2021.Order intake was 16.5 % higher, also turnovers increased in comparison to 2020 by 10.4 %. Without the difficulties in the supply chains, leading to order delays, such figures would have been even better. SMEs and large companies were profiting from the up-swing. The capacity utilisation was correlating in the manufacture and was in the fourth quarter 2021 at 89.8 %, in 2020 it settled at 78.3 %. According to the latest figures by KOF the regarding capacity utilisation was in January 2022 at 91.9 %. Therefore, it is no surprise that the personnel of the MEM Industry increased: In the fourth quarter 2021 to 318900, thus 1.2 % higher yoy. This increase proves once more that in Switezrland there is no de-indstrialising. The industry is a very attractive and seminal employer.
Higher exports in all goods groups
The goods exports of the MEM-Industry increased in 2021 in comparison with 2020 by 12.7 % and reached a value of CHF 68.5 billlion. All major markets developed positively. Exports to the EU increased by 16.5 %, to the USA by 11.4 % and the ones to Asia by 7.2 %. All major groups of goods were participating in the up-swing. Against 2020 the exports of metals were 21.3 % higer, precision instruments 11.2 %, and electrotechnics/electronics 10.6 % and engineering 9.1 %.
The war in the Ukraine clouds the prospects
Swissmem director Stefan Brupacher commented the business situation: The order volume of the MEM Industry amoounted in the fourth quarter 2021 almost 16 % over the pre-crisis volume. On real business terms the majority of MEM-firms have left the pandemic relevant crises.” Also the turnover level in the forth quarter 2022 surpassed for the first time the level existing before the crisis. Only very few sub-sectors could not yet profit of the up-swing, such as the sub-suppliers of automotives and the flight industry.
The most important indices tend to the fact that the growth rates will continue during 2022. “In practically all export markets the PMI is over the growth threshold”, states Stefan Brupbacher. “Also the expectations of the entrepreneurs are in general for the future 12 months positive.” In the latest Swissmem Survey 43 % of the companies calculate with an increase, another 44 % with a consistent order volume from abroad. Also the uptrend in occupation is continuing. In the 1279 Swissmnem associated firms the numeber of online advertised positions have increased by 60 %.
However there are risks to take into account that would impede the up-swing. First of all the conflict in the Ukraine. “Such war is creating new insecurities, weakening the demand for investment goods. That would impede the MEM sectors immediately, says Martin Hirzel, President of Swissmem. “In addition there is an escape into the CHF and resulting a strong higher value against thew EUR , as well as higher prices for energy and raw materials. How incisive such consequences will be is not estimable. Other impeding facts are the existing trade conflicts with China. A braking effect do have the problems in the supply chains, relaxing only in the second half of 2022.
Research funding programme «Horizon Europe” is essential for the Swiss Industry
The most important success factor for the Swiss industrey is and remains the innovation power. This means continued investment in Research and Development. From “Horizon 2020” the Swiss industry was profiting. Now the missing association of Switzerland to the successor programme “Horizon Europe” risks to weaken the innovation power of the industry. Martin Hirzel underlines: The global centre of the manufaturing technique and the engineering research is not located in Asia or the USA, but in Switzerland, Germany, Austria and North Italy. The exclusion from “Horizon Europe” decouples Switzerland partially from the research and innovation cluster. The Federal Government has increased its own reearch means. However this fact is not feasible to make up for the cross border collaboration in mixed consortios. In addition Swiss universities, also in the tech sector have a purge of highly qualified researcher that could be poached to other countries. Such highly qualified persons are in this case also lost for the industry. Swissmem is requesting from the Federal Councillors to undertake all necessary to allow an association of Switzerland to “Horizon Europe” during 2022. In addition needed and realistic substitute and supplementary measures are demanded to keep running the innovation engine. With such measures it is guaranted that the industry is not loosing the connection to the top of the world class.
Within this context, Swissmem welcomes the steps to stabilise the bilateral path. The industry depends on a quick access to markets and energy security. Swissmem is expecting to be invited to such future consultations.