Business climate in the MEM industries at its lowest level for three and a half years

The business climate in the MEM sector cooled further in the fall, as the latest quarterly survey by Swissmechanic shows. In October 2024, the Swissmechanic SME-MEM business climate index slipped to its lowest level since January 2021. The SME MEM pulse meter has now been in negative territory for a year and a half. Only 1% of companies describe the current business climate as very favorable. In contrast, 74% rate it as somewhat to very unfavorable.

Staff cuts at one in three SME MEMs

The lack of orders remains the biggest challenge, followed by the ongoing negative impact of the strong Swiss franc. Overall, 60% of SMEs recorded a slump in sales in the third quarter of 2024 and almost the same number recorded falling margins. Companies' capacity utilization is currently only just over 80%. In addition, almost a third of the SMEs surveyed only have production secured for a maximum period of four weeks. A third of the companies had to reduce staff compared to the previous year. A quarter of them lack the funds to invest.

2024 remains difficult, 2025 offers cautious hope

SMEs are therefore pessimistic about the final quarter of 2024. Foreign demand remains the major challenge. Around half of the companies surveyed expect further declines in orders, sales and margins. Despite the current challenges, there are signs of a possible economic recovery in 2025, according to the experts. Falling energy prices and lower interest rates could provide impetus for the MEM industries next year and enable at least a slight recovery.

Source: www.swissmechanic.ch