Uncertainty dampens export sentiment among Swiss SMEs

Export sentiment, as measured by Switzerland Global Enterprise in a semi-annual survey of internationally active Swiss SMEs, fell in the last six months for the second time in a row. Since the last high at the beginning of 2022, the value has now fallen by a total of 24.2 points and, at 52.3 points, is just above the growth threshold of 50 points. In addition to the well-known challenges – including currency risks, the unclear relationship between Switzerland and the EU, tensions between the US and China, and increasing protectionism – there is now also the current US tariff policy. From the outset, it has become the biggest headache, affecting 61% of the Swiss SMEs surveyed.

Different reactions to the new tariffs

But even in these challenging times, Swiss SMEs are proving their agility and adapting their strategies. The most frequent response to US tariffs is a price increase (26% of SMEs). 23% want to sell more of their goods in alternative markets, 21% are reducing their margins, and 17% are adjusting their supply chains. In addition, 7% of SMEs have initiated a stronger presence in the US thus far, with a further 11% considering such a measure. 

Hopes for the second half of the year thanks to proven markets

While the performance of the previous half-year was well below expectations, a slightly positive development is expected for the next six months: 37% of the SMEs surveyed expect exports to grow, 39% anticipate stagnation, and 24% expect decline. SMEs are relying on proven markets: As usual, Germany leads the way, followed by France, the US, Italy and Austria. India is in vogue, not least due to the negotiated free trade agreement, and is showing the biggest growth of all countries. 

China growing in importance

A very similar and also very stable picture emerges when SMEs are asked about their three most important export destinations (measured by volume of trade). The only noteworthy but striking change is in China, which has seen significant growth and is becoming the third most important market for Swiss SMEs after Germany and the US. It is conceivable that the country will also benefit from current US trade policy.

SMEs in the Gulf States

In the new markets, the Gulf states have regained the top position, which they had previously ceded to India. 10% of the companies surveyed plan to tap back into the Gulf region. India (7%) and the US (6%) are in second and third place, with both countries losing ground. India is expected to make significant gains again when the free trade agreement is ratified. For the US, further development will depend heavily on its tariff policy. Almost half (48%) of all companies surveyed are not currently considering any new target markets at all, which is cause for concern.