Engineering industry picks up steam

New orders are helping to lift the engineering industries Keystone

Switzerland's largest export branch - engineering - reports that after a "gratifying" 2005 it expects further growth this year.

Swissmem, which is the umbrella organisation of the mechanical and electrical engineering industries, said that exports last year totalled SFr61.3 billion ($46.89 billion) or 3.9 per cent up on the previous year’s figures.

It described the rise in sales of three per cent and in new orders received of 4.5 per cent as “healthy”.

Swissmem’s 290 reporting members said orders from abroad had picked up by 3.8 per cent while domestic orders had risen by 6.5 per cent. The export ratio was a high 78.8 per cent.

Domestic sales fell slightly (-0.9 per cent) compared with the previous year.

The organisation, based in Zurich, said there were considerable differences between specific regions and countries regarding export performance.

Positive trend

Exports to the European Union and the United States showed a positive trend, rising by 4.9 per cent and 6.1 per cent.

Sales to the most import European markets also advanced, with neighbouring Germany up 5.4 per cent, the Netherlands 16.1 per cent and Austria 2.1 per cent.

Business in France and Italy declined slightly, but exports to the new EU members strengthened without exception.

Exports to Asia were up by one per cent, with India recording a 44.4 per cent increase. But exports to South Korea were down by 10.8 per cent and to Taiwan by 25.5 per cent.

Swissmem reported that the “great majority” of reporting members surveyed took an optimistic view of the outlook for the next 12 months.

Sustainable demand

Companies expected to see sustainable demand in eastern Europe and Russia as well as China and Hong Kong.

Among a list of political wishes for 2006, Swissmem called upon the electricity sector to make use of its favourable cost structures to help Switzerland remain an attractive location for industry.

It also commented that it felt Switzerland still had much catching up to do in terms of knowledge and technology transfer, an area of importance to its members.

It was therefore backing a number of projects which had this in mind.

swissinfo

Key facts

Total exports: SFr61 billion (+3.9%)
Sales rose by 3% and new orders received by 4.5%.
Orders in the fourth quarter of 2005 were considerably higher (+12.6%) than in the same period of 2004, with both international (+9.3%) and domestic business (+24.1%) contributing to the growth.
In 2005, the industries employed 309,585 people.

In brief

Swissmem is the umbrella under which the two associations of the Swiss mechanical and electrical engineering industries – the ASM Association of Swiss Engineering Employers and the VSM Swiss Association of Machinery Manufacturers – represent the interests of their nearly 1,000 member countries.

The industries occupy a key position in the Swiss economy. With about 309,000 employees, they are Switzerland’s biggest industrial employer by far.

They export goods worth SFr55 billion (2003), equivalent to 42% of the country’s visible exports.

Their goods range from technically sophisticated products and services to entire systems and plants.