The outlook for the Swiss export sector has dimmed in recent months, as shown by the survey of Swiss SMEs in the export sector conducted by Switzerland Global En-terprise every six months. Export sentiment figures have fallen from 66.7 to 51.6 points and are thus only slightly above the growth threshold of 50 points. All signs point to stagnation. This picture is confirmed by the fact that 31% of all companies surveyed will not be entering new markets in the coming months: 10% more than six months ago. 62% of SMEs are not planning to change their number of employees, and 17% even forecast that they will reduce their workforce.
This situation is due to ongoing global challenges and is currently being exacerbat-ed by the sudden appreciation of the Swiss franc. 80% of SMEs say that exchange rate developments affect their business “negatively” (55%) or “very negatively” (25%). As a result, currency risks are pushing high energy and commodity prices from number one to number two on their list of worries.
Europe and the US as the most important export destinations
Little change can be expected in terms of the desired target markets. Together with the United States, Switzerland’s European neighbors – Germany in particular – re-main the country’s most important export destinations. 79% of all companies surveyed plan to export to Germany in the next six months, followed by France, Italy and the US (all 56%).
Need for information on sustainability regulations
Sustainability is high on the political agenda. These regulations can also have a direct or indirect impact on several thousand companies in Switzerland. Many Swiss SMEs still seem to be unaware of this, as the issue of sustainability has, in fact, declined in importance among the companies surveyed in recent months. This may also be related to the complexity of international rules. The survey shows that there is a significant need for information: 46% of companies want information on requirements, special regulations and framework conditions in target countries so they can navigate the international regulatory jungle.
Alberto Silini, Senior Director of Global Consulting, explains: “With the exception of the brief slump at the start of the COVID pandemic, export sentiment is currently at its lowest level since January 2016 and is forecast to stagnate over the coming months. Swiss SMEs have so far successfully defied the persistent geopolitical challenges. How-ever, the sudden new appreciation of the Swiss franc makes it even harder to com-pete in a market already shaped by difficult conditions: four out of five SMEs expect exchange rate developments to have a negative impact on their business perfor-mance. This means that currency risks are now the biggest challenge, ahead of en-ergy and commodity prices.”
Sylvain Jaccard, Senior Director of the Western Switzerland Market: “Few changes are in sight in the coming months in terms of export destinations. On the one hand, Europe and the United States remain the main outlets by a wide margin, with Germany strengthen-ing its position in the top spot. On the other hand, the current situation has reduced SMEs’ risk appetites: one in three companies has no intention of entering a new market in the short term. The proportion of enterprises experiencing concern has therefore increased by 10% since the last survey six months ago. And that is not a good sign.”
Luca Degiovannini, Senior Director of the Southern Switzerland Market, reports: “Policymakers are making headway in the sustainability field. For example, the EU’s planned Corporate Sustainability Due Diligence Directive (CSDDD) could have a direct or indirect impact on several thousand companies in Switzerland. Many SMEs do not seem to have fully grasped these developments: 64% of SMEs feel that they are “hardly” or “not at all” affected by increasing sustainability reporting require-ments. It is likely that this is mainly due to a lack of information. Almost half of SMEs want to receive this in the future – and Switzerland Global Enterprise will provide it to them.”
Further information on the SME export sentiment for the first half of 2024 can be found in the brochure below.
Video statements on current export sentiment from Alberto Silini, Senior Director of Global Consult-ing, Sylvain Jaccard, Senior Director of the Western Switzerland Market, and Luca Degiovannini, Sen-ior Director of the Southern Switzerland Market, are available here.
The results of the survey on SME export sentiment for the second half of 2024 will be published on June 25, 2024.