Switzerland: The swiss industry will not die out
How have the companies reacted to the currency shock?
In order to stifle the negative effects of strong Francs, the companies of MEM industry must react with a number of measures. Product and process improvements such as increase in efficiency (64% of companies), rigorous product cost management (57%) and measures for forcing innovation (48%) have priority. Moreover, it is apparent that over half of the companies (51%) were forced to reduce prices in order to be not put out of business after the decision of Swiss National Bank. This is one of the reasons for the partially massive margin losses. So far the measures, which directly affected the employees, were taken very reluctantly. I am however afraid that there would be an increase in short-time work and staff reductions in the second half of the year.
Which sections of the MEM industry are not affected by appreciation and why?
The least affected are the companies which are widely placed internationally and thus can hedge the currency risk easily with targeted measures. Another category is the companies which have sole presence in their market and correspondingly can also implement price increases for their customers.
What are the long-term prospects of collaboration with Swiss companies for the German enterprises, according to your estimations?
The Swiss MEM industry is not going down. It has proved multiple times in the past that it can handle more difficult situations. The Swiss companies shall therefore remain absolutely reliable business partners for German companies even in the future and deliver the usual high service and product quality. The strong Franc cannot change anything in this regard. On the contrary: The companies shall strengthen their efforts for even better products and services. Because, only in this way, the Swiss companies can realise higher prices and thus adequate profit margins again in foreign countries. The one who adjust to the tightened conditions shall gain competitive strength in the medium-term.