Photo: Swissmem
The Swiss metal industry association Swissmem views the dramatic appreciation of the Swiss franc against the euro and the US dollar as a threat to the tech industry, which exports 80% of its products. This development is detrimental to companies already struggling with a sharp decline in orders due to the industrial recession.
The Swiss tech industry employs over 330,000 people and accounts for almost 30 percent of Swiss exports. This globally networked sector, dominated by SMEs, is accustomed to strong economic cycles. Currently, the industry is in a recession: in the first three quarters of 2023, it struggled with a 10.5 percent drop in orders compared to the same period of the previous year. This is primarily because many key sales markets, such as Germany and China, continue to experience significant challenges.
For several weeks now, Swiss industry has also been confronted with a dramatically rising exchange rate of the Swiss franc against the currencies of its main competitors in the Eurozone, the USA and Japan: In just over a month, the euro has lost over 4 percent against the Swiss franc; the US dollar has even fallen by about the same amount in the last 3 weeks.
Local industry has learned to cope with a strong Swiss franc. However, the current situation is extremely challenging, as the rate of appreciation is dramatic. This poses an acute threat to the competitiveness of Swiss companies. Swissmem supports the independence of the Swiss National Bank (SNB), which ensures price stability. But with inflation now clearly below 2 percent, the association of the Swiss tech industry expects the SNB to respond appropriately to the situation of Swiss industrial companies within the scope of its mandate in the face of such sudden appreciations.
Because upward pressure on the Swiss franc is expected to persist, Swissmem sees the more important lever in the medium term as lying with policymakers: they must quickly and consistently improve the framework conditions with concrete measures. For example, the unilateral abolition of industrial tariffs by January 2024, which Swissmem has long advocated, is a step in the right direction, but by no means sufficient.
Relations with Europe should be stabilized through the Bilateral Agreements 3 – without harmful new accompanying measures. Regulations that drive up prices should be prevented by Parliament.
