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Swiss SMEs: Sales are up from a year ago
Small and medium-sized enterprises (SMEs) in Switzerland have seen an increase in sales year-on-year. But going into the third quarter, it does not look likely that growth will accelerate. Prospects for apprentices, however, are very encouraging. These are the findings of the quarterly survey conducted in May and June by UBS, in cooperation with the Swiss Industry and Trade Association.
Small and medium-sized service providers and industrials saw a sales turnaround starting in the first quarter of the year. In the second quarter, sales increased again year-on-year. At the same time, sales stagnated in the building and retail sectors, and shrinking sales continued in the tourism industry. Year-on-year, SMEs are doing better than large companies, which were only able to stabilize sales.
SMEs increase apprenticeships
The number of available apprenticeships is set to increase in the next training year, both among small and medium-sized enterprises and large companies. However, the proportion of SMEs planning to increase the number of apprenticeships is higher than that of large companies with expansion plans. On average, small companies will offer three apprenticeships, medium-sized companies six and large companies 25.
Growth for industrial SMEs
The recovery in the industrial sector is continuing. The survey results show that profits, overall turnover and staff numbers have improved since the start of this year. The business climate – based on survey findings on production, turnover and new orders – is becoming noticeably brighter, improving in the second quarter. In the third quarter, too, SMEs are expecting further improvement. While SMEs and large companies have similar estimates with regard to the development of their sales, SMEs are somewhat more cautious when it comes to earnings expectations.
Upward trend in service sector continues
Profits and cash flows of SMEs in the service sector stabilized in the first quarter, while sales increased slightly. In the second quarter, profits and sales increased year-on-year, while employment figures and sales prices remained stable. SMEs are planning to increase their workforces in the third quarter, while large companies expect further job cuts despite higher earnings expectations and comparable sales forecasts.
Further drop in profits for the tourism industry
Following a slowdown in the erosion of profits in the first quarter, SMEs in the tourism sector once again reported sharper drops in profits and cash flows in the second quarter. Sales are still falling. The results of the survey were no better for large companies than for SMEs, with the exception of stable staff levels. In the coming quarter, the latter expect sales to stabilize, while sales prices and staff numbers will remain unchanged.
Retail sector stable at last year's level
In the retail sector, the development in sales and employment were comparable with that of the second quarter of 2009. There were reports of further price decreases, and SMEs in the retail sector expect no significant improvement when it comes to prices in the next quarter. Large retail companies, meanwhile, are coming under greater price pressure than are SMEs. The former continue to trim staff, while SMEs have been operating with stable staff numbers since the first quarter. Both large companies and SMEs expect modest sales growth in the third quarter.
Stable sales in the building sector
The downward trend of prices in the building sector continued unabated in the second quarter, while profits also fell further year-on-year. Sales, however, remained unchanged and SMEs are actually employing more staff. Companies do not expect any big changes in business development in the next quarter.
Figures for the current quarter show that SMEs are continuing their recovery from the crisis. However, their forecasts for the coming quarter remain cautious, as shown by the results of the latest quarterly survey, undertaken within the context of the UBS SME barometer and in cooperation with the Swiss Industry and Trade Association. Around 450 SMEs and 180 large companies took part in the survey, carried out between the middle of May and the middle of June.
The business climate is calculated on the basis of the survey results for output, incoming orders and revenue in the manufacturing sector. Data on cash flow and on an industry-specific level have been collected since the first quarter of 2009.
Notes: Previous quarter trends are extrapolated actual results (grey bars). Current quarter trends are companies' expectations (shaded bar). The respondents were asked about the change compared to the same quarter in the previous year. The collected data is evaluated using a diffusion index. The results can range between -100 and +100, with results at or around zero [-5;5] representing stagnation, results up to -50 (+50) representing a deterioration (improvement) and results below -50 (above +50) representing a major deterioration (improvement). The data do not represent a percentage change in the parameter.
Carla Duss, WMR Economic Research Switzerland
Tel. +41-44-234 21 19
Caesar Lack, Head WMR Macroeconomic Research Switzerland
Tel. +41-44-234 44 13
Schweizerischer Gewerbeverband (sgv)
Dr. Rudolf Horber, Chief Economist sgv
Tel. +41-31-380 14 34, +41-78-813 65 85
Hans-Ulrich Bigler, Director sgv
Tel. +41-79-285 47 09
The Schweizerische Gewerbeverband sgv (sgv – Swiss Industry and Trade Association) is the umbrella organization for small and medium-sized enterprises. It was founded in 1879 and is now the largest business association in Switzerland. The sgv represents the interests of some 300,000 small and medium-sized enterprises. Most of these companies are members of approximately 255 industry and professional associations and of cantonal industry and trade associations, which are organized on a multi-sector basis.