Switzerland Records Weak Foreign Trade In 2011

by Ulrika Lomas, Tax-News.com, Brussels

07 February 2012

The strong Swiss franc and the gloomy outlook for the global economy have affected Swiss foreign trade, according to the latest figures released by the Swiss Federal Department of Finance (FDF).

In a recent release, the FDF explains that although exports rose by a total of 2% to CHF197.6bn (USD214bn) last year, compared to 7% in 2010, most sectors experienced a decline in export activity, and at the same time, exporters were forced to make significant price concessions. The FDF notes that while demand in Asia flourished, it stagnated in Europe.

In terms of quarterly performance, the FDF notes that the pace of growth weakened from one quarter to the next, even falling slightly into the red in the third quarter, although picking up again in the final quarter. Aside from the global economic slowdown, the main drag on exports was the strong Swiss franc, the FDF underscores.

Highlighting the fact that the watch industry is the Confederation’s “star exporter”, thanks to phenomenal growth of 19%, or CHF3bn recorded in 2011, the FDF reveals that the metal industry, the machine and electronic industry, the food, beverages and tobacco sector, all posted only moderate growth, while the other six industrial sectors (chemical industry, precision instruments, plastics industry, clothing industry, textile industry, paper and graphic arts industry) all posted a drop in sales.

The FDF emphasizes that the sector results were badly hit by falling prices, especially in the machine and electronic industry.

Aside from a decline in Africa (-5%) and a slight drop in the European Union (EU) (-1%), exports to all regions increased, the FDF states, noting that shipments to Asia rose by 10% and to Oceania (Australia) rose by 6%. Exports to North America increased by 2%.

In terms of individual countries, the FDF alludes to the fact that more goods were also exported to Germany, Switzerland’s most important export market, with a reported increase of 6% (+CHF2bn). Germany alone accounts for half the export growth, the FDF adds.

Imports remained flat at virtually the same level as 2010, at CHF173.7bn, representing an increase of 1.9% in real terms, the FDF reveals, noting that imports were generally weaker in nominal terms in three of the four main categories (raw materials and semi-finished products, capital goods and consumer goods), and were obviously affected by lower prices.

The overall stagnation in imports was the result of opposing trends: while imports from North America and Asia both fell by 6%, those from the EU were 1% higher. Imports from Latin America were much stronger, with a rise of 7%.

In terms of individual countries, imports from Kazakhstan (crude oil) soared by 78%. Shipments from India increased by a sixth. Imports from Poland, Sweden and India rose between 7% and 8%, while those from Italy, Hong Kong and China were all 3% higher.

By contrast, imports from the major economies were lower, with the UK down 9% and the US, Japan and the Netherlands down 4%.

The difference between exports and imports pushed Switzerland’s trade surplus to a new record high of CHF24bn, CHF4bn (22%) higher than 2010.

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