The Credit Suisse export barometer, which records foreign demand for Swiss products, currently stands at a level of 1.03; this compares with 0.62 in the previous quarter. The upward trend that began at the start of the year has continued unabated in recent months. Not only are exports significantly above the growth threshold, but they have also risen above the long-term average of 1 for the first time since the end of 2011.

As shown by the SME export prospects survey conducted by Switzerland Global Enterprise (S-GE), the stronger foreign demand has not yet fully filtered through to Swiss SMEs. At 59.3 points, export sentiment at the start of the fourth quarter of 2013 is slightly less optimistic than in the preceding quarter (63.4 points). The figure is calculated from the export sentiment of SMEs for the fourth quarter of 2013, as well as effective exports in the preceding quarter. The SME export prospects survey nevertheless continues to indicate a rise in exports, given that the growth threshold is 50 points on a scale of 0 to 100. 37% of the Swiss SMEs responding expect exports to grow during the coming quarter, 47% anticipate stagnation in the volume of their exports, while 16% fear declining exports.

All Sectors in Optimistic Mood
According to the SME export prospects survey conducted by S-GE, all sectors are optimistic at the start of the final quarter of 2013. Companies from the chemicals/pharmaceuticals sector head the list by a significant margin. The metals, consumer goods, and electrical engineering sectors likewise expect solid growth in exports in the fourth quarter of 2013. Companies in the machinery and paper industries are slightly more cautious, while only minimal growth is anticipated by the precision instruments industry.

52% of the SMEs predicting growth in their exports ascribe this to product innovation, compared with 54% in the previous quarter (multiple answers possible). At 45% (44%), increased marketing efforts are the second most important factor mentioned by companies. SMEs rate the economic environment significantly more positively: 38% expect to be able to raise exports as a consequence of economic recovery (29% in preceding quarter).

Industrialized Countries Strong, Emerging Markets Weak
The Credit Suisse Export Barometer forecasts differing trends for the various export markets: Prospects for exports to the industrialized countries appear especially positive. A strong boost to growth can be expected from the US, Japan, the UK, as well as a number of northern and eastern European countries. There are also indications of a return to growth in exports in nearly all countries of the euro zone. A sharp jump in demand is anticipated from the Netherlands in particular. Only in the case of France and Greece is a drop in demand expected. By contrast, export prospects remain slightly negative in terms of the major
emergingmarket countries. Only Turkey is expected to generate an increase in demand.

92% of the firms surveyed by S-GE intend to export to Europe over the coming six months, slightly fewer than in the preceding quarter (95%; multiple answers possible). The most important European export market is still Germany: 77% of the SMEs surveyed will export their goods or services to this country, followed by France, which is cited by 57%, Austria by 53%, and Italy by 47%. 61% of Swiss SMEs intend to export to the Asia-Pacific region in the next six months, representing a distinct increase compared with the 55% figure for the previous period. Foremost among the Asian export destinations is China with 37% of mentions, ahead of India and Australia with 28% each. 47% of SMEs are likely to export to North America in the coming six months (42%), 31% to the Middle East/Africa region (34%), and 27% to South America (20%).

One Out of Two SMEs Benefit from Free Trade Agreements
In its latest survey, S-GE also questioned Swiss SMEs about the importance of Switzerland's existing free trade agreements as well as those that are due to come into effect. The views expressed by the firms that responded were very evenly split: While 49% of SMEs confirmed that free trade agreements are exerting a positive effect on exports, 51% failed to notice any difference. The number of positive responses was significantly above-average in the case of the chemicals/pharmaceuticals (60%) and consumer goods (58%) sectors, and below-average for the metals industry (35%) and service sector (44%). Asked which of the various free trade agreements were of material importance to them, 87% of those SMEs responding favorably cited the free trade agreement with the EU (multiple answers possible). In second place is the agreement with China (65%) that was signed this year. This is followed by the agreements with the EFTA countries (43%), ahead of Japan (40%) and Turkey (33%).


Methodology of the Credit Suisse Export Barometer
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 approximately 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. The export barometer consolidates this information to produce a single indicator. Since the values in question are standardized, the export barometer is calibrated in standard deviations. The zero line corresponds to the growth threshold. The long-term average growth of Swiss exports of approximately 5% is 1.

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

Methodology of the SME Export Outlook Indicator of Switzerland Global Enterprise
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. To emphasize the forecast nature of the SME export indicator, expected export activity in the following quarter is weighted at 60% with exports in the current quarter being weighted at 40%. The SME export indicator can range from 0 to 100, whereby figures between 0 and 50 signal 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.