Coutts: Spotlight Switzerland

(Bild: © Schlierner – Fotolia.com)

London – The strong Swiss franc makes it increasingly difficult for companies to compete with foreign competitors. Data from Swissmen, industry association of the machinery, electronics and metals sectors, shows that new orders fell by around 11% in H1 2012 compared to the same period a year ago.

It is clear that previous strong quarters of economic growth were based on building of backlogs – yet this source of growth is fading. Analysis of Swiss export data since 1984 shows it typically takes two years for exports to feel the impact from changes in the trade-weighted Swiss franc. If this pattern continues, then the longer the floor in the euro-Swiss franc exchange rate is in place, the less pressure we will see on exports.

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