Swiss foreign trade suffers from uncertainty

The generally weak economic climate in many sales markets held back Swiss exporters last year. Exports of goods (cyclical total 1, without transit trade and valuable items) are trending largely sideways. The import dynamic has also been weak overall. Whilst according to the Federal Customs Administration exports rose compared to the previous year by 3.9% to a record high of 242 billion francs, this increase was more attributable to exports by the chemicals and pharmaceuticals industry, which are less cyclically sensitive.

In spite of fact that a major national pharmaceutical company has been selling a share of its foreign production directly since last year, which is thus no longer being supplied through Switzerland (resulting in reduced imports and exports), exports of the most important categories of goods rose during the year by almost 10%. With a share of 47%, almost half of the goods exported from Switzerland (total 1) are chemicals or pharmaceuticals.

Engineering, electrical and metal industries post their first falls since 2015

Exporters of other categories of goods experienced a much stronger headwind last year. The low propensity to invest abroad had a negative impact in particular on the engineering, electrical and metal industries. Exports of machinery and electronics fell last year by 4.4%, whilst metals experts were down by as much as 5.7% on the previous year. This represents the first fall for both categories of goods since 2015, the year of the “Swiss franc shock”. In addition, exports of precision instruments, watches and jewellery grew much more slowly last year. Exporters of watches were particularly affected by difficulties in their largest sales market, Hong Kong.

Since the start of the year, a new factor has compounded the various uncertainties that weighed down the Swiss export economy last year. The rapid spread of the Coronavirus has resulted in production stoppages, supply chain disruption and the loss of transport capacity, which has had a negative knock-on effect on the Swiss export industry. Whether the virus will also have a negative effect on exports over the longer term will be largely dependent upon the subsequent course of the epidemic.