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Employer President Valentin Vogt paints a grim picture in the “NZZ”. Expect more than 200,000 unemployed and a dramatic wave of bankruptcies next spring. He strongly advises against stumbling from one block to the next relaxation.
“We absolutely have to avoid that yo-yo effect and prepare for the fact that the current regime will run until spring. After all, the second wave has so far affected economic life significantly less than the first wave, ”he says. And: “Schools, borders and also shops in most cantons will remain open. Private consumption has not collapsed either. But currently we have 150,000 unemployed and an estimated 300,000 people have a short-time job. “
He is particularly concerned with long-term development. “We have to continue on the current path and only have the restrictions that are absolutely necessary in a decentralized way. The most important stabilizer is and will be short-term work, ”continues Vogt. “It is also important not to worsen general economic conditions any further.
“Some industries are losing ground”
The Swiss economy is likely to contract again by the end of the year due to new measures to contain the coronavirus, UBS said in its “Swiss Outlook.” A deep recession is not to be expected. However, as confidence deteriorates, the dichotomy in economic recovery increases.
This is known as the K-shaped recovery: “Some industries are recovering, others are losing ground,” UBS economist Alessandro Bee told an online press conference. The pharmaceutical and financial sectors, for example, were not particularly affected by the crisis. There are also areas that recovered quickly, such as construction.
On the other hand, there are industries that were already weakened by the recession in the first half of the year, Bee said. This included the gastronomy, travel and events industries. These are again the most affected. “A further downturn in the economy may force many ailing companies to finally give up,” Bee said.
Unemployment at 3.9 percent
Therefore, he expects both bankruptcies and unemployment to increase in the coming months. Overall, UBS anticipates that unemployment will rise to 3.9 percent next year.
In many affected industries, the crisis is accelerating structural change, Bee said. Online trading has benefited enormously. Meanwhile, fixed catering could lose ground, while home delivery services are booming. “This trend could continue beyond the crisis if people get used to it.”
UBS Chief Economist Daniel Kalt also noted that not all countries deal with this structural change in the same way: “How quickly and forcefully do we allow structural change? There are two approaches in the world. ”In Europe and also in Switzerland, for example, companies are supported by short-time hours, which ensures that people keep their jobs and that companies can continue to exist.
Milderer’s Lock
In the United States, by contrast, most of the support went not to businesses but directly to private households through increased unemployment benefits and checks. “In the medium term, this means that structural change will pass much faster in the US and that companies will adapt more quickly,” Kalt said. By hindering structural change in this country, you also influence long-term growth potential.
But Switzerland was also able to play trump cards in this crisis. So it did well compared to other countries. The Economist Bee sees two reasons for this: First, the closure in Switzerland in the spring was smoother and less prolonged than in neighboring countries. Second, the crisis-resistant Swiss pharmaceutical industry contributes greatly to value creation.
The economy contracts 4.5 percent
Overall, UBS economists continue to expect the Swiss economy to contract 4.5 percent in 2020. However, given the current situation, the recovery in the next year is likely to start a little later than expected. previously: thus, they lowered the forecast for 2021 to +3.2 percent from +3.9 percent in September. The recovery should continue in 2022 with +3.1 percent.
There could be a faster recovery in early 2021 if a vaccine were available quickly, Bee said. Since yesterday this no longer seems so unlikely: on Monday, pharmaceutical companies Biontech and Pfizer presented encouraging results of the study.
However, economic risks remained high, UBS warned. If the pandemic calls for a new national shutdown in Switzerland and Europe, a second severe recession would be inevitable. (pbe)
