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Coronavirus crisis: SME export sentiment at historic low

SME Export Outlook for second half of 2020

The coronavirus crisis has led to a slump in the export sentiment of internationally active Swiss SMEs. According to the latest survey conducted by Switzerland Global Enterprise (S-GE), 65% of all SMEs will record a decline in exports at the end of the first semester of 2020. The pandemic has had negative commercial implications for 81% of the surveyed companies, above all due to the collapse in demand and slumping sales and revenues figures. For the second semester, just 39% anticipate a rise in exports. There has also been a huge fall in the Credit Suisse Export Barometer.

SME Export Outlook

As a result of the global coronavirus crisis, SME export sentiment has fallen to its lowest lev-el since the survey was first conducted by Switzerland Global Enterprise (S-GE) back in 2010. According to the latest survey, which was carried out between the start of May and the start of June 2020, two thirds of SMEs are set to record a decline in exports as per the end of the first semester of 2020. The pandemic has had negative commercial implications for 81% of the surveyed companies, above all due to the collapse in demand, slumping sales and reve-nues figures, and a lack of predictability. Looking forward to the second semester of 2020, 39% of SMEs anticipate rising exports, while 23% expect stagnation and 38% are bracing themselves for a further decline.

The repercussions of the coronavirus crisis are also very much evident in the Credit Suisse Export Barometer, which reflects foreign demand for Swiss products. The figure recorded in April (-2.59) has only ever been lower during the financial crisis back in 2008. Although the Export Barometer bounced back to -1.54 in May 2020, this is still well below the growth threshold.

Tiziana Hunziker, an Economist at Credit Suisse, commented: “In particular state-decreed protective measures and production shutdowns have led to disruptions of international sup-ply chains, along with a stagnation in corporate investment. We believe the majority of ex-porters will have recorded their lowest export volumes in April. Although the exports of the MEM industry experienced a rebound in Asia as early as April, rising unemployment and losses of income can be expected to persist a while longer. Sectors that are particularly sen-sitive to consumer confidence – such as the watchmaking industry, for example – will there-fore probably have to wait a while longer for a rebound.”

Alberto Silini, Head of Consulting at Switzerland Global Enterprise (S-GE), added: “The coronavirus crisis has acted like a brake on global trade. Internationally-oriented Swiss SMEs have been heavily impacted by the slump in demand, as is starkly reflected in the historically low level of export sentiment. However, the survey also shows that many companies have experienced a stabilization in the meantime, and are now looking to the future with more optimism. Following a phase dominated by crisis management, the onus is now on Swiss SMEs to swiftly adapt their value creation chains to the new circumstances and return to their target markets with a better strategy than their international competitors. Tapping into new sales markets and exploring new procurement sources as well as hedging instruments are key for purposes of currency and export risk diversification.”

Further information on the SME export outlook for the first half of 2020 can be found in the brochure in the download section.

Video statements (in German) on current export sentiment by Tiziana Hunziker, Credit Suisse economist, and Alberto Silini, Head of Consulting at Switzerland Global Enterprise, are available here.

The SME Export Outlook for the second semester of 2021 will be published on January 21, 2021.

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