The Credit Suisse export barometer, which records foreign demand for Swiss products, stands at a level of -0.33 in the second quarter of 2012. The figure is therefore higher again than in the first quarter, and also considerably above the growth threshold of -1. A slight decline was recorded in the past few weeks, however. Whether this decline already constitutes the end of the latest phase of acceleration will become apparent from developments over the coming months. In overall terms, growth prospects still appear cautiously optimistic.

The Osec SME export prospects survey also shows a brightening of export sentiment: It currently stands at 60.2 points, compared with 49.5 points in the preceding quarter. This figure is calculated from the export sentiment of SMEs for the second quarter of 2012, as well as effective exports in the preceding quarter. On this scale from 0 to 100, values of over 50 indicate a rise in exports. With the figure for the last two quarters having been below the growth threshold, a significant leap into the growth zone has now been achieved. 38.0% of the Swiss SMEs responding to Osec's SME export prospects survey expect growth in exports during the coming quarter; this compares with 30.3% in the preceding quarter. Just 11.5% of SMEs fear a decline in exports, compared with 26.5% at the start of the first quarter of 2012.

Paper Products Industry Misses the Growth Train
Slightly above-average export prospects are predicted for the metal industry, as well as electronics and precision instruments, according to the Credit Suisse export barometer. The paper products industry continues to exhibit the most subdued prospects.

The Osec SME export prospects survey highlights significant differences between the individual sectors: By far the most optimistic in terms of the development of exports in the second quarter of 2012 are firms in the consumer goods industry. The chemicals/pharmaceuticals, electrical engineering, services, and metal industry likewise expect solid growth in exports. The paper products industry again lies at the lower end, anticipating a decline in exports for the second quarter of 2012.

The companies that are predicting growth in exports over the coming months ascribe this mainly to product innovation (cited by 52%; multiple answers possible) and increased marketing efforts (49%). Marketing in particular is a significantly more important factor compared with preceding quarters. The recovery in the economic environment factor (cited by 25%) has also increased in significance. SMEs that expect a decline in exports now attribute this primarily to competitive pressures: 54% named this as a factor, compared with 45% in the preceding quarter. By contrast, fears of an economic downturn have subsided: Just 42% of SMEs name this as a factor, compared with 65% in the preceding quarter.

Europe Remains Dominant Export Market
According to the Credit Suisse export barometer, the main impetus to growth is currently expected to come from the US and some emerging-market countries such as India and Taiwan. As for Europe, the export trend is likely to remain one of weakness or even stagnation.

Notwithstanding both the strength of the Swiss franc and the euro crisis, Europe remains by far the most important destination region for Swiss exports. 95% of the Swiss SMEs surveyed by Osec intend to export to Europe over the coming six months, versus 90% in the preceding quarter (multiple answers possible). 56% of Swiss SMEs will export to the Asia-Pacific region in the next six months (previous period: 55%). 43% of SMEs are likely to export to North America in the coming six months, 34% to the Middle East/Africa region, and 25% to South America.

Less Concern about Strong Swiss Franc
The exchange-rate problem has eased slightly: At the start of the second quarter of 2012, 64% of the companies in the Osec SME export prospects survey expect the growth in their exports to slow as a result of the strong Swiss franc. In the preceding quarters, the figure was 70% and 73% respectively. The service sector, in which only 36% of firms surveyed expect a negative influence, is looking especially resilient. Consumer goods and machinery are especially sensitive about exchange-rate developments, with 76% of SMEs in both industries expecting a negative influence.

75% of the SMEs surveyed stated that the strong franc was adversely affecting their profit margins. In the preceding quarter it was 79%. Pressure on margins was especially pronounced in the metal industry (95%), electrical engineering (82%), and paper products (80%) sectors. The 25% of SMEs that were not concerned about any negative impact on profit margins said the main reason was that they were able to impose price increases.

Methodik Credit Suisse Exportbarometer
The Credit Suisse export barometer takes as its basis the dependence of Swiss exports on foreign export markets. In constructing the export barometer, we have drawn together important leading industry indicators in Switzerland's 28 most important export countries. These indicators generally have a forecast horizon of roughly one to two quarters. The values of these leading indicators are weighted on the basis of the share of exports that goes to each country and are consolidated to form a single indicator. Since the values in question are standardized, the export barometer is calibrated in standard deviations. The zero line corresponds to the long-term average growth in Swiss exports of 4.8% since 1985. Accordingly, the growth threshold lies below the zero line at around -1.

For more detailed information: Credit Suisse (2009), Swiss Foreign Trade – Facts and Trends Swiss Issues Sectors, available at www.credit-suisse.com/research

Osec SME Export Outlook Indicator
The SME export outlook indicator is based on the quarterly survey of a fixed panel of more than 200 Swiss SMEs representing the pharmaceuticals/chemicals industry, machinery, consumer goods, the metals industry, paper, electrical engineering, the precision instruments industry, as well as services. SMEs indicate whether they expect growth, stagnation or a decline in exports for the current quarter as well as the coming one. The SME export indicator can range from 0 to 100, whereby figures between 0 and 50 show an expected decline in exports and figures of 50 to 100 an expected rise in exports. Participants provide further information on export volumes, for instance the reasons for a change in their export volume, export markets, etc. This information gives an accurate picture of the export activities of Swiss SMEs.