According to Swissmem, the situation for the Swiss tech industry deteriorated further in the second quarter – even before the impact of the reported "US tariff increase". Compared to the same period last year, sales fell by 2.5 percent, orders by 2.3 percent, and goods exports by 0.9 percent.
According to the report, order volume fell by 13.4 percent in the second quarter compared to the previous quarter. Since this decline occurred before the difficulties caused by US tariffs, an accelerated drop in orders is expected in the coming months. This threatens a massive deepening of the existing industrial recession.
Massive tightening
Swissmem is calling on the Federal Council and Parliament to take swift domestic measures to improve the framework conditions for the export industry and thus save jobs, and has launched a petition to this effect.
The Swiss machinery, electrical, and metal industries, as well as related technology sectors, have now recorded nine consecutive quarters of declining sales compared to the same period last year. Capacity utilization in these companies reached 80.9 percent in the second quarter – significantly below the long-term average of 86.2 percent. The number of employees in the tech industry fell by 3,100 to 324,600 in the second quarter.
Graphic: Swissmem
The main reason for the decline in goods exports was the weak performance towards Asia (-7%), with China being particularly affected (-16.8%). Exports to the EU stagnated (-0.1%), while those to the USA rose slightly overall (+1%). Although US exports had increased sharply in the first quarter compared to the same period last year (+5.3%), they collapsed in the second quarter following the threat of tariffs (-3.1%).
Swissmem CEO Stefan Brupbacher is deeply concerned: “The political uncertainties had a significant impact on demand for capital goods in the second quarter. We are in a dangerous downward spiral, the pull of which is now being further intensified by the US tariffs. This is dramatic for the affected companies, employees, and regions.”
Despite the difficult situation, tech companies are fighting on. Eighty percent of firms want to tap into new markets and 60 percent want to develop new business areas. "This shows the spirit of the Swiss tech industry. The companies aren't complaining, but rather seeking new paths," emphasizes Swissmem President Martin Hirzel.
But the proportion of companies planning drastic measures such as job cuts (37%), relocations to the EU (31%), or short-time work (28%) is high. "We are in a delicate phase. Numerous companies are preparing downsizing and relocation plans. Layoffs are unavoidable. How extensive these will be depends on how quickly policymakers can ease the 39 percent US tariff."
The Federal Council and Parliament are called upon to reduce the overall burden on businesses. A reduction in bureaucracy and a halt to new regulations are urgently needed. Furthermore, there must be no additional levies. This includes, among other things, payroll taxes. Parliament also has the power during the autumn session to extend the duration of short-time work compensation to 24 months. This could prevent mass layoffs. Finally, the revision of the War Materiel Act must be completed. Only in this way can the arms industry in Switzerland be saved and Switzerland's security guaranteed.
