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The first quarter was only a preview: the consequences of the crown pandemic will only affect the industry in the second and third quarters. Specifically, incoming orders in the mechanical, electrical, and metals (MEM) industries decreased 2.0 percent and sales decreased 5.7 percent in the first quarter of the year compared to the prior year.
Earlier this year, the negative trend that started in mid-2018 continued, industry association Swissmem announced Monday. According to the data, the reasons for this were the weak economy and the greater appreciation of the Swiss franc against the euro.
It was resinous even before closing
Exports declined sharply in the reference period, falling 8.4 percent compared to the first quarter of 2019 to CHF 15.8 billion. According to the information, this decrease in exports is mainly the result of the sharp drop in order intake in the previous year. This also shows the first consequences of the blockade in the sales markets, as they say.
However, the first quarter figures mainly show the picture before closing. The consequences of this would only affect the industry in the second and third quarters, according to the announcement.
Many orders are canceled
Results from Swissmem’s latest survey of member companies clearly indicate a negative development: 70 percent of surveyed companies anticipate a decrease in incoming orders from abroad. At the end of 2019, it was only 28 percent.
In addition, almost half of the MEM companies (48 percent) are receiving cancellations due to the pandemic. These sales will fall in the coming months. Cancellations and the collapse of orders resulted in 80 percent of MEM companies having to apply for a job in the short term, the association continued.
Technicians must be able to travel
In the current difficult situation, the industry is asking politicians to improve framework conditions, such as the lifting of industrial tariffs.
Eliminating these tariffs would result in annual cost savings of around 125 million Swiss francs for the MEM industry alone, according to Swissmem, as well as considerable administrative relief. Swissmem, therefore, requires that the National Council and the Council of States approve the proposal of the Federal Council in the summer session so that the lifting of industrial tariffs can take effect in early 2021.
It also hopes to loosen travel restrictions, extend the deadline for submitting bridge loan applications until the end of 2020, and increase the period for short-term job benefits to 18 months. (SDA / koh)
