At its half-year conference, the representatives of the industrial association Swissmem were able to report good news as the MEM industry is again moving ahead. Branch figures display a consistently positive development.
The mood in the Swiss machine, electrical and metal industry (MEM industry) is positive, almost euphoric, because business has never been so good since the release of the euro median exchange rate by the Swiss National Bank. In the first half of 2019, orders went up by 245 percent compared to the same period last year, reflected in a 16 percent rise in turnover.
MEM industry exports rising
In exports, too, the sector has made a big step forward, with a 7.5 percent increase in exports in the first half of 2018, amounting to 34.8 billion francs. Exports to the EU (+9.1%) and the USA (+7.3%) posted particularly strong gains. Although exports to China increased by 10%, declining exports to the remaining Asian countries, especially to the Middle East, brought the overall figure for Asia to +1.5%. Exports in the metal (+11.1) and machine construction (+9.2) sectors developed particularly well.
Employment and shortage of specialists
The good business development is also reflected in the employment figures in the MEM industry. In the first quarter of the year the Swiss MEM industry employed 325,500 people, 2.6 percent more than during the same period last year. Thus, within just one year, the sector made up for 60 percent of the job losses caused by the increase in the media exchange rate. In the second quarter, capacity exploitation in MEM plants was 91.9 percent, clearly above the long-year average of 86.4 percent.
One of the biggest challenges for the MEM industry is the shortage of specialists, which will become even more acute over the coming years.
Swissmem wants to counteract this development by various means and make careers in MINT (mathematics, information science, natural sciences and technology) more attractive, also for women:
- The retraining initiative should allow adults with completed primary training to receive secondary training in a new vocational environment
- The job market suitability of young people, women and older employees should be increased.
- Compatibility of family and career should be improved
- The current general employment contract of the MEM industry contains various measures to encourage the professional advancement and further training of employees, making the MEM industry more attractive as an employer.
Wage demands by “Angestellte Schweiz”
The good business in the MEM industry should also reach the employees, according to the employees association “Angestellte Schweiz”. Therefore the MEM industry is calling for wage increases of up to 2.3%, depending on the sub-segment. These demands are supported by segment figures from the industrial research institute BAK Economics, which disclose a 3.5% increase in gross value added last year and a 5.1% increase in 2018. The economic research institute is still forecasting growth of 3.4% for 2019.
The good business situation should continue for another six to twelve months, says Swissmem. After that, the economic situation could slacken, as suggested by slower growth in earlier cyclical sectors. Swissmem's member companies are also of a similar opinion. According to the most recent survey, 51 percent of entrepreneurs expect orders from abroad to remain unchanged at the same level over the next 12 months. By contrast, the number of those expecting higher orders fell by 12 percentage points in the second quarter of 2018 compared with the first quarter (Q1/18: 48% / Q2/18: 36%).