MEM industries: seriously affected by strong franc

In the aftermath of 15 January 2015 (removal of the EUR/CHF floor by the Swiss National Bank), companies in Switzerland’s mechanical and electrical engineering industries (MEM industries) acted swiftly and initiated a considerable number of measures to mitigate the impact of the strong franc. Even so, the franc’s massive over-valuation is having serious effects. New orders and sales in the MEM industries declined markedly in the first half of 2015 compared with the prior-year period. Over half of MEM companies are grappling with sharp and in some cases significant declines in margins. More than one third of them are expecting to make an operating loss in 2015. The countermeasures adopted by the companies are focusing primarily on initiatives to optimize products and processes. However, 18% of MEM businesses are planning to relocate at least some sections of their manufacturing operations to other countries if the exchange rate remains around CHF 1.05 to the euro. With a catalogue of specific measures, Swissmem is calling on policymakers to take immediate action to bolster Switzerland's attractiveness as a centre of industry.