Export Sentiment of Swiss SMEs at Historic Low

As a result of the pandemic, SME export sentiment has fallen to its lowest level since Switzerland Global Enterprise (S-GE) first conducted its export survey in 2010. According to the current survey, conducted between the beginning of May and the beginning of June 2020, around two-thirds of the Swiss SMEs surveyed will have to accept a decline in their exports by the end of the first half of 2020. The pandemic has negative business consequences for 81 % of the companies, primarily due to the slump in demand suffered, the loss of sales and revenue, and the lack of certainty in expectations and planning. Looking ahead to the second half of 2020, 39 % of SMEs expect exports to increase, while 23 % anticipate stagnation and 38 % expect a further decline.

Credit Suisse Export Barometer also shows low export sentiment

The Credit Suisse Export Barometer, which tracks foreign demand for Swiss products, also clearly shows the effects of the Corona crisis. Its April value of -2.59 was only undercut during the financial crisis in 2008. In May 2020, the export barometer rose again to a value of -1.54, although this is still well below the growth threshold. Tiziana Hunziker, economist at Credit Suisse, says: "In particular, government protection measures and production stops led to interruptions in international commodity chains and triggered an investment backlog. We assume that for the majority of exporters, the low point was reached in April. Exports by the machinery, electrical and metal industry (MEM industry) to the Asian region were already showing signs of an upward trend in April. However, income shortfalls and rising unemployment are likely to persist for some time. Industries that are particularly dependent on consumer sentiment, such as the watch industry, will probably have to wait longer for an upturn."

Global trade is slowed down

Alberto Silini, Head of Consulting at Switzerland Global Enterprise (S-GE), notes: "The Corona crisis has put the brakes on global trade. Internationally oriented Swiss SMEs have been severely affected by this slump, which is impressively reflected by the historically low level of export sentiment. However, our survey shows that many companies have been able to stabilize in the meantime and are once again more optimistic about the future. After a phase characterized by crisis management, Swiss SMEs must now quickly adapt their own value chains to the new circumstances and return to their target markets with a better strategy than their international competitors. The diversification of sales markets and procurement sources as well as the use of hedging instruments against currency and other export risks play an important role in this context."

Source and further information: www.s-ge.com/exportperspektiven