Sales in the Swiss mechanical and electrical engineering industries (MEM industries) rose by 8.5 percent year-on-year in the third quarter of 2018. Taking the first nine months as a whole, sales in the MEM industries showed a 13.6 percent increase compared with the previous year, with large companies and SMEs benefiting equally from this development. In the period from January to September 2018, new orders also rose by +13.1 percent year on year, although growth momentum slowed in the third quarter. Compared with the same quarter of the previous year, new orders fell by 6.0 percent. Capacity utilization among MEM companies reached 91.2 percent in the third quarter of 2018, which is well above the long-term average of 86.4 percent. It was almost unchanged in October 2018 at 92.1 percent according to the latest figures published by the KOF. The good business performance in the MEM industries is also having an effect on employment levels. In the first six months of 2018, the number of employees rose by 5,300 compared with the prior-year period to 317,500.
Exports: growth in all markets
According to figures from the Swiss Customs Administration, goods exports by the MEM industries recorded a year-on-year rise of 6.1 percent in the first nine months of 2018. The total merchandise value was CHF 51.7 billion. Exports grew in all key sales regions. Goods exports to the USA (+10.8%) and EU (+6.9%) performed particularly well, and exports to Asia were also up slightly (+0.9%). Looking at the individual product segments, metal industry exports rose by 8.9 percent, precision instrument exports by 8.1 percent, mechanical engineering exports by 6.3 percent, and electrical/electronics exports by 6.1 percent. Taking the third quarter of 2018 in isolation, however, there is also a detectable slowdown in export growth.
Business trend likely to level off
The situation in the Swiss MEM industries remains pleasing, even though new orders fell slightly in the third quarter of 2018 compared with the same period of 2017. However, a look at the new orders index shows that they remain at a comparatively high level. Nevertheless, with the exception of the USA, the economic trend in the key sales markets points to a slowdown in growth momentum. Swissmem President Hans Hess views the current situation accordingly: “The performance of the MEM industries is solid, although I assume that it will level out over the next few months due to the economic trend”. This assessment also matches the expectations of business owners in the MEM industries. According to the Swissmem survey carried out inOctober 2018, 49 percent of companies are anticipating a steady level of orders from abroad over the coming 12 months: a substantial 30 percent are expecting orders to rise. However, the number who expect a decline in orders has also increased from 13 to 21 percent.
No to the Self-Determination Initiative
On 25 November 2018 the Swiss electorate will decide on the Self-Determination Initiative (SBI). This is relevant to the MEM industries as it jeopardizes numerous international agreements that guarantee easy access to key sales markets. “For me, it goes without saying that I abide by agreements. I expect the same from all other parties involved, whether they are a business partner or a government”, says Hans Hess. The SVP Swiss People's Party’s SBI initiative aims to disrupt this natural way of doing things. “As a country subject to the rule of law and an exporting nation, Switzerland cannot afford to do this”, Hans Hess emphasizes. The Swissmem Council has therefore decided to say “no” to the SBI.
