The downward trend has been halted. Export sentiment among SMEs is improving.
The export barometer shows another slight fall. Why demand for Swiss exports is nevertheless expected to increase, and what the biggest challenges are for exports out of Switzerland.
Growth in exports continues to weaken
The Credit Suisse export barometer has fallen again slightly. At 0.35 points, it is only just above the growth threshold and well below the long-term average of 1.0. Weak demand for Swiss goods from Europe's industrial sector hit the Swiss machinery, electronics, and metals industry (MEM industry) in the first quarter of 2019, dragging its exports down 2.6%.
The demand situation in the US has worsened slightly, says Credit Suisse, although in Europe it has at least stabilized. Even so, momentum in Europe is unlikely to strengthen significantly again any time soon based on the latest European Purchasing Manager Indices (PMI). Nevertheless, Credit Suisse is ruling out the prospect of a fall in the total volume of exports.
Swiss SMEs expect exports to rise again
Although the Credit Suisse export barometer now stands at its lowest level since October 2013, Credit Suisse expects the demand for Swiss products to continue increasing in global terms – if on a smaller scale and at a more leisurely pace than in the previous year. SME export sentiment shows a similar picture. According to a survey by Switzerland Global Enterprise (S-GE), the latter has started rising again slightly after the downward trend of recent months. Half the Swiss SMEs anticipate exporting more over the coming quarter.
Exports pose challenges for Swiss SMEs
Swiss SMEs need to overcome many challenges if they are to export successfully. By far the biggest one, according to the S-GE survey, is the ability to find suitable business partners in the destination country. Second is the need to market products or services the right way. The creation of a network is the third difficulty most frequently cited by Swiss SMEs. However, currency fluctuations and the need to overcome trade barriers due to conflicts in economic policy are other significant factors affecting exports.