Falling orders and margins, downsizing: the environment in the machinery, electrical equipment and metals (MEM) industry has never been more difficult, according to the small and medium-sized business climate index (SME) MEM established by Swissmechanic.
The index fell in October 2024 to its lowest level since January 2021, the association said in a press release on Wednesday. According to this barometer, 74% of the companies surveyed believe that the current context is rather unfavorable, or even very unfavorable.
SMEs are facing several difficulties: drop in orders, declining turnover and margins, strong franc, reduction in workforce. In total, 60% of companies saw their turnover and margins decline in the third quarter of 2024. Capacity utilization is currently below 80%.
In addition, one in three companies has had to reduce its workforce compared to the previous year, while one in four lacks equity to invest. Furthermore, for almost a third of them, production is only guaranteed for a maximum period of four weeks.
Possible recovery in 2025
The last quarter of 2024 is expected to remain difficult, due to weak external demand. Around half of the SMEs surveyed expect a further decline in orders, turnover and margins.
However, the year 2025 promises to be under better auspices, according to the Swissmechanic barometer. There are signs of a possible economic recovery. Lower energy prices and lower interest rates could indeed boost the MEM sector.
ats/ther
Business
