Swiss manufacturing Strong franc to halt Swiss engineering growth in 2012

Author / Editor: Eric Culp / Jürgen Schreier

Most Swiss mechanical and electrical engineering companies expect no growth this year after new orders and sales stagnated in 2011 due to a strong local currency, according to a survey by the Swissmem industrial association.

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The current tough economic environment will continue to persist, the association said, noting that until eurozone countries find a credible exit from the debt crisis, it is extremely unlikely the Swiss franc will depreciate significantly. The euro-franc exchange rate is likely to remain slightly above the 1.20 mark this year, which will result in further margin loss for many companies, it said. In addition, the EU economy, the key sales market for sectors, is expected to remain flat or even decline slightly, which will weigh heavily on suppliers.

Companies in the sector are being forced to implement several measures, some of them unpopular, to regain their ability to compete at the international level. In addition, Switzerland is not yet managing to fully exploit its potential for innovation, the group said.

Since the 2008 slump, sales in the MEM industries have changed little and on average remain some 25% below pre-crisis levels. According to Swissmem, many firms are living off reserves and fighting for survival.

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Zürich, Switzerland

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