The FINANCIAL — Export-oriented SMEs in Switzerland are getting off to a good start in the new year. Export sentiment heading into Q1 2014 hasn’t been this sanguine since mid-2011.
The FINANCIAL — Export-oriented SMEs in Switzerland are getting off to a good start in the new year. Export sentiment heading into Q1 2014 hasn’t been this sanguine since mid-2011. Although the individual sectors of industry vary in their optimism, the growth is geographically broad-based. Demand for Swiss products looks poised to rise in practically all major customer markets, according to the findings of the SME export indicator produced by Credit Suisse and Switzerland Global Enterprise (S-GE, formerly Osec).
Swiss SMEs likewise expect export growth to pick up, shows the SME export prospects survey conducted by S-GE. The SME export outlook index currently stands at a level of 64.9 points, which is well above the prior quarter’s 59.3 points and is the highest reading since the third quarter of 2011. The index reading was calculated by taking SME export sentiment for the first quarter of 2014 and combining that with actual exports in the preceding quarter. On the scale of 0 to 100, readings above 50 signal rising exports. The trend toward growth has continued among the SMEs surveyed. Forty-two percent of the respondents expect exports to increase in the quarter ahead, up from 37% in the prior quarter. Flat export volume is anticipated by 47% of SMEs, the same percentage as at the start of Q4 2013. Just 11% of SMEs fear a decline in exports, down from 16% in the prior quarter, according to CREDIT SUISSE GROUP AG.
The individual industries in Switzerland’s export sector headed into the new year with varying degrees of optimism. Companies in the service sector and in the chemicals/pharmaceuticals industry top the index list by a sizable margin. The paper, consumer goods, precision instruments and metals industries likewise expect to see growth in exports in the first quarter of 2014. Companies in the mechanical and electrical engineering industries, in contrast, anticipate a decline in exports.
Stepped-up marketing was the reason most frequently cited in the survey for the increase in exports. Fifty-one percent of SMEs cited this factor, compared with 45% in the previous quarter (multiple answers possible). Product innovation was the second most important factor cited; it was mentioned by 48% of SMEs, compared with 52% in the prior quarter. SMEs rate the macroeconomic climate a bit more positively for the first quarter of 2014: 39% expect to be able to boost their exports on the back of the economic recovery, compared with 38% in the preceding quarter, according to CREDIT SUISSE GROUP AG.
The Credit Suisse Export Barometer indicates that demand for Swiss products looks set to increase in practically all major customer markets. Powerful growth stimulus is expected to come from Japan, the USA and the UK. The outlook for exports to the big emerging economies China, India, Russia and Brazil appears somewhat more moderate, but is still positive. The signs in the euro zone as well are pointing to growth as the new year gets underway. In Germany and Italy, expectations regarding imports from Switzerland are at their highest level in 30 months. Demand looks set to continue to decline only in France and Greece.
Ninety-two percent of the companies surveyed by S-GE intend to export to Europe over the next six months, the same percentage as in the prior quarter (92%; multiple answers possible). Germany remains the most important European export market: 75% of the SMEs surveyed will export goods or services to Germany, followed by France cited in 54% of responses, Austria at 47% and Italy at 41%. Fifty-eight percent of Swiss SMEs will export to the Asia-Pacific region over the next six months, a bit fewer than in the previous period (61%). The leading Asian export destination is China, which was cited by 35% of companies, ahead of India at 26% and Australia at 25%. Forty-four percent of SMEs are likely to export to North America over the next six months (47%), 32% to the Middle East/Africa region (31%), and 22% to South America (27%), according to CREDIT SUISSE GROUP AG.
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