Good business climate at MEM SMEs

SMEs in the MEM sector report a good business climate. The high pace of incoming orders and sales continued among companies in the fourth quarter of 2021, the industry association Swissmechanic announced after the latest quarterly survey. Around two-thirds of the companies surveyed recorded higher incoming orders compared to the same quarter last year, 69 percent were able to increase their sales, and half of the companies achieved better margins.

The export figures confirm this positive trend, even if the peak values from the summer half-year 2021 were not reached. Capacity utilization is high and, at 94 percent, is above the level seen before the Corona crisis. The upturn has also reached the labor market after a prolonged lean period; the trend toward staff expansion is continuing according to the survey at the beginning of the year.

Business climate expected to remain good in 2022

The Swissmechanic Business Climate Index was in positive territory for the third time in a row in January 2022 and has reached a new high. "Around 80 percent of the SMEs surveyed assessed the business climate as positive. That is more businesses than in October 2021. Order backlogs have also remained at a persistently high level," says Jürg Marti, Director of Swissmechanic Switzerland.

However, the tense supply chains continue to be a brake on momentum and are at the top of the list of the biggest challenges for 62 percent of companies, according to Swissmechanic. Depending on how the pandemic progresses, the problem could even be temporarily exacerbated by China's zero-covid policy. In addition to the supply chain problem, SMEs are also increasingly concerned about labor shortages and exchange rate developments.

For a secure and climate-neutral energy supply in Switzerland

Despite supply chain problems, a shortage of skilled workers and the strong Swiss franc, the MEM sector is looking to the future with confidence. But for how much longer? From the point of view of Swissmechanic Switzerland, the looming electricity shortage is jeopardizing the security of supply in Switzerland. However, a reliable power supply that meets demand at all times of the year and at competitive prices is a key competitive factor for Switzerland as a manufacturing location. The industry association fears that electricity prices, which are already rising sharply, will put a strain on the entire production and supply chain and drive up inflation.

It would therefore be wrong to rely on imported electricity: "We need domestic production capacities. But gas-fired power plants are not compatible with climate protection; we need alternatives," writes Swissmechanic in a media release. For this reason, the association is calling for an energy policy that is open to new technologies, one that does not exclude nuclear power and creates the conditions for permitting new-generation nuclear power plants.

In the whole climate and energy discussion, the MEM industries are an important part of the solution, it continues. In order to play this key role, it needs an economic policy environment that is conducive to research, development and innovation. For this reason, Swissmechanic is committed to the dismantling of regulatory and bureaucratic barriers and to attractive framework conditions for Switzerland as a business location.

Source: Swissmechanic