Corporate Press Release

Press Release

SME Export Indicator Q2 2014: Optimism despite setback in Asia

The outlook for foreign demand for Swiss export goods receded slightly from the previous quarter. It has dimmed particularly for exports to Asian markets. Nevertheless, Swiss SMEs remain just as optimistic as before. Export sentiment hasn’t been this sanguine since mid-2011, and all sectors are anticipating rising exports. Swiss exports are being spurred by growth in the USA and the UK, as well as by the progressing recovery in the euro zone. Those are the findings of the SME export indicator produced by Credit Suisse and Switzerland Global Enterprise.

The Credit Suisse Export Barometer, which tracks foreign demand for Swiss products, currently stands at a level of 1.17 (previous quarter: 1.36), which marks a mild dent in the upward trend that has been in place for the last one-and-a-half years. However, export growth expectations are still above the expansion threshold and are also above the historical average of approximately 1.

The SME export prospects survey conducted by Switzerland Global Enterprise (S-GE) indicates that Swiss SMEs’ optimism continues unabated. The SME export outlook index currently stands at a level of 69.5 points, the highest reading since the second quarter of 2011. The index reading was calculated by taking SME export sentiment for the second quarter of 2014 and combining that with actual exports in the first quarter. On the scale of 0 to 100, readings above 50 signal rising exports. More than half (53%) of the SMEs expect exports to increase in the quarter ahead, up from just 42% in the prior quarter. Flat export volume is anticipated by 41% of SMEs, down from 47% at the start of Q1 2014. And now just 6% of SMEs fear a decline in exports, as opposed to 11% in the previous quarter.

All sectors are expressing optimism
According to the SME export prospects survey conducted by S-GE, all sectors of industry have headed into the second quarter optimistically. Companies in the mechanical and electrical engineering industries and in the service sector top the index list.

When asked to name the reasons for their expected increase in exports, 50% of SMEs cited stepped-up marketing and 50% product innovation (multiple answers possible). Intensified marketing efforts stand in the foreground particularly in the service sector, and now in the chemical and pharmaceutical sectors as well. The electrical engineering, mechanical engineering and consumer goods sectors are primarily investing their efforts in product innovation. The larger SMEs – those with between 50 and 249 employees – are tending to concentrate more on product innovation, whereas marketing stands in the foreground at smaller companies.

Setback in Asian markets
The Credit Suisse Export Barometer indicates that the prospects for exports to Asia have dimmed compared to the prior quarter. The production decline in China is particularly muting the outlook for trade with Switzerland. Powerful export growth stimulus is still expected to come from the USA and the UK. The recovery in the euro zone as well continues to progress across a broad range of industries and countries. On the whole, right now the prospects for exporting to Switzerland’s neighboring countries are the best they’ve been in three years, though export trade with Germany is still likely to exhibit the strongest momentum.

The setback in Asian markets is also visible in the S-GE SME export prospects survey results: now only 51% of SMEs will export to the Asia-Pacific region over the next six months, down from 58% in the prior period (multiple answers possible). India’s ranking as an export destination has fallen considerably, with now only 19% of the companies surveyed intending to send exports there, down from 26% in the prior quarter. The percentage of companies citing China also dropped, to 31% from 35% at the start of the prior quarter. Japan slipped to 22% (23%) and Australia to 20% (25%). Europe is still by far the leading export destination: 91% of the SMEs surveyed intend to export goods or services to Europe (92%). Germany remains the most important European export market, with 77% of the SMEs surveyed citing that country (75%), followed by France at 52% (54%), Austria at 46% (47%) and Italy at 40% (41%). Forty-four percent of the SMEs will export to North America over the next six months (44%), 25% to the Middle East/Africa region (32%), and 21% to South America (22%).

No inflation expected again in 2014
The respondents to the SME export prospects survey expect to see no or very little inflation in Switzerland once again in 2014: 5% anticipate an inflation rate below 0%, 45% foresee one of approximately 0%, 38% project mild inflation of 0%–0.5%, and only 12% expect to see a higher inflation rate.

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

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.