Difficult times continue for the MEM industries
The Swissmechanic SME MEM Business Climate Index for February 2025 continues to show a tense situation in the mechanical and electrical engineering industries (MEM). The business climate has been in negative territory for more than 18 months, exacerbated by weak foreign demand, the strong Swiss franc and increased production costs.
Almost 60 % of the companies surveyed reported a decline in orders. Only 18 % of the companies reported an increase in turnover. The majority of companies do not see the situation improving any time soon. Over 500 companies took part in the quarterly survey - a very pleasingly high number.
The ongoing margin problem remains a particular burden: 51 % of companies report stagnating or negative margins. Production costs remain high, while sales prices are often unable to rise to the same extent. Another key problem is the severely limited willingness to invest: 27 % of companies state that financial restrictions are preventing investments (in November 2024, the figure was 25 %).
Investments remain difficult
The uncertainty in the markets is also reflected in the willingness to invest. The situation is particularly critical for smaller companies, which are finding it difficult to mobilize their own funds and secure a solid financing base due to the erosion of margins. Only 26 % of companies are planning to increase their production capacities in the coming year, which is having a negative impact on the long-term development of the sector.
Outlook: No rapid recovery in sight
Despite a slight stabilization of the business climate, only a few companies expect a rapid improvement. Only 14 % of companies expect the situation to improve significantly in the next three months. The high level of uncertainty in the global economy, coupled with the structural challenges facing the sector, point to continued difficult developments.
Swissmechanic is calling on politicians and business organizations to improve the framework conditions for the MEM industries and to support SMEs in order to secure their competitiveness and strengthen their investment power - for example by simplifying regulations.
