Strong franc: Europe gains importance for procurement among SMEs

Visable surveyed more than 80 SMEs about their economic situation in an online survey at the turn of the year 2019/20. Visable offers companies various options for increasing their reach on the Internet. Visable also includes the B2B marketplace "Wer liefert was" and the European B2B platform EUROPAGES.

Strong Swiss franc depresses profit

Asked generally about the consequences of the economic uncertainties, two-thirds (62.6 %) of SMEs said they were not feeling any impact. According to the Visable survey, the renewed strength of the Swiss franc appears to have little impact on the order situation and sales of Swiss SMEs. However, 24.1 percent of companies are suffering from a decline in profits. "Export-oriented companies are suffering from the strong franc. Because Swiss prices are becoming more expensive for foreign countries, Swiss companies are exposed to price pressure. If prices have to be lowered, the profit margin dwindles," explains Peter F. Schmid, CEO of Visable. A quarter of the companies are reacting to the more difficult economic environment by reducing or stopping investments. And another quarter are no longer advertising new jobs.

So while a strong Swiss franc has tangible consequences for some companies, the consequences of the US-China and US-Europe trade conflict are far less dramatic. Only 19.3 percent of companies believe that the trade conflict will have a negative impact on their company. As the Visable survey shows, the conflict has no negative consequences for the clear majority of 67.5 percent.

Europe gains importance for procurement

When it comes to the question of whether the more difficult economic conditions have changed the procurement strategy, some shifts are emerging with regard to the preferred trading regions. If the orientation of purchasing has changed, then European trading partners in particular are gaining in importance (26.5 %). However, there are also companies that increasingly purchase in China (10.8 %) or in the USA (4.8 %). At the same time, there are SMEs that believe that the markets in China and the USA are becoming less important. With regard to China, however, this seems to be irrelevant. For only 3.6 percent of the companies surveyed, China is losing importance. The U.S. market, on the other hand, does seem to be losing ground, with 7.2 percent of respondents saying this is the case.

"Some companies can capitalize on the trade conflict by stepping into the breach and selectively increasing trade with the U.S. or China," says Peter F. Schmid, CEO of Visable. "China is a little more important as a trading partner right now. That has to do with being a low-wage country, but also with the trade agreement with Switzerland. But the U.S. could follow suit later, if new prospects arise from the envisaged trade agreement," adds Peter F. Schmid.

Brexit of little relevance for Switzerland due to weak trade balance

The impending Brexit is virtually irrelevant for Swiss SMEs. Three quarters of the companies (75.9 %) stated that the UK's exit from the EU will not have any negative consequences for them. "England is far less important as a trading partner for Switzerland than Germany, the USA, Italy, France or China," explains Peter F. Schmid. "Because of the weak trade balance with England, the economic consequences of the Brexit are comparatively low," says the CEO of Visable.

More generally, despite the growing economic challenges, over half of the companies surveyed (53.7 %) believe that their competitiveness vis-à-vis the competition has remained the same. However, as many as 18.3 percent of SMEs have to contend with a more difficult competitive situation. In contrast, for 14.6 percent, competitive pressure has actually decreased.

Source: Visible