2023-08-22 08:35:15
Swiss exports further slowed the pace in July, dragged down by the chemical and pharmaceutical industry, as well as machinery and electronics. The decline was particularly significant towards China and the United States.
During the month under review, exports fell by 5.7% in nominal terms (not adjusted for inflation) to 20.6 billion francs, while imports fell by 3.3% to 18.0 billion. Foreign trade still ended the month with a surplus of 2.6 billion, down around 20% compared to June, the Federal Office of Customs and Border Security (OFDF) announced on Tuesday.
“The Swiss trade balance remains in surplus. This is a major contribution to Swiss growth, which explains more than 6% of GDP,” noted Arthur Jurus, investment director at Oddo BHF Switzerland.
International sales were notably hampered by the 7.7% decline, after -4% in June, of exports of chemical and pharmaceutical products. The machinery and electronics sector also deepened its decline to -1.5%, against -1% the previous month. The watch industry reversed the positive trend of June (+3.8%) to post a decline of 0.5% in July.
The global economic slowdown is having an impact on exporters, particularly in the euro zone (-5.2%), the main outlet for Swiss companies. The two main customers, Germany (+0.8%) and Italy (+0.1%), nevertheless maintained their purchases, while France recorded a tiny decline of 1%.
The decline was more marked in Asia and mainly in China (-11.7%) which is facing a slowdown in the economy and serious difficulties in the real estate market. Sales to Japan (-11.1%) also contracted sharply.
Slowdown in global demand
North America was not immune to the economic slowdown, with exports to the United States falling 12.9%.
“Global demand is running out of steam and Switzerland is no exception. The Chinese deconfinement did not have the expected effect and the recovery ran out of steam in the second quarter, leading to a deflationary situation”, added Mr. Jurus .
The latter expects global growth to slow to 2.7% this year and 2.5% in 2024. Swiss gross domestic product (GDP) is expected to grow by just 0.8% this year, but accelerate by 1.4% in 2024, according to projections by Oddo BHF Switzerland. “The outlook for more specialized Swiss exporters is therefore better compared to other countries. Nevertheless, the global slowdown will keep export growth weaker through to the end of the year,” warned Arthur Jurus.
The CS CFA index concocted by Credit Suisse had recently noted that the outlook remained gloomy for the main partners of Swiss exports, the euro zone and the United States. In this area, expectations are darkening.
SMEs are not spared by the global economic cooling. According to the Raiffeisen sector PMI, the situation for internationally oriented players will remain temporarily difficult due to weak demand abroad.
This article has been published automatically. Source: ats/awp
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