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UBS SME barometer: Industry achieves trend reversal

Zurich/Basel Media Switzerland

In April, large Swiss industrial enterprises – as in previous months – fared better commercially than their small and medium-sized counterparts (SMEs). Business conditions for large companies and SMEs alike improved significantly in recent months. Service companies were satisfied with business conditions despite weaker dynamics.

The barometer for large industrial enterprises has improved continuously since December. From March to April, the barometer for large companies increased to 1.21 points from 0.88 points. An upward trend has also been observed among SMEs since January, with the SME barometer improving by 0.30 points to 0.42 points last month. However, despite this recovery among SMEs, commercial circumstances were still significantly worse for them than for large companies.

Large industrial enterprises increase production

Although business conditions in industry clearly brightened in recent months, according to both barometers, most large companies assessed their financial situation as merely satisfactory. The SMEs still assessed their business situation as bad in April – despite the improvement. The mixed assessment is due to continuing weak international demand and deteriorated profits both for large companies as well as SMEs. Thanks to the economic recovery in Europe, we expect international demand for Swiss goods to grow. Companies also deemed the level of employment too high.

Regardless of company size, business conditions in the construction industry remain comfortable. The order backlog improved both for large companies as well as for SMEs, albeit to a lesser extent for SMEs. Despite assessing the level of commerce as good, the earnings situation for most SMEs as well as large companies remained bad. The earnings situation was slightly better for architecture and engineering firms than for the construction industry, having stabilized compared to the previous quarter. Business activity is still at a very high level, although dynamics have tailed off slightly for large companies and SMEs. It remains to be seen whether this is already a trend reversal. But it could indicate that the architecture and engineering firms assess their general economic situation slightly more cautiously than they did a few months ago because of the acceptance of the initiative against mass immigration.

In general, the companies in the service sector, which is dominated more by domestic business, assessed their business situation better than industrial enterprises, although momentum has tailed off slightly here. While SMEs among industrial enterprises consistently performed worse, the situation in the service sector provides a more differentiated picture. For example, the SMEs assessed their business situation as better, and even with regards to price expectations they tend to be more optimistic than the large companies. Fortunately, the earnings situation of the big companies improved again. Among SMEs, the earnings situation remained stable compared with the previous quarter for the fourth successive quarter.

The tourism industry remained an exception. Despite rising demand – among other things as the result of a rise in the number of hotel stays – the business conditions of the companies in this segment hardly improved at all. Regardless of company size, the companies assessed their business situation as poor. This assessment was based among other things on deterioration in the earnings situation despite robust sales figures.

The rising barometer for the large companies and SMEs supports our view that industry is recovering. We expect that especially the export-oriented companies will be able to benefit from rising foreign demand due to the economic recovery in the Eurozone and the US as well as ongoing solid growth in many emerging countries. Service enterprises are likely to continue benefiting from a strong domestic consumption.

UBS SME barometer 


Service sector


Media contact

Sibille Duss, UBS Chief Investment Office WM
Phone +41 44 235 69 54,

Veronica Weisser, UBS Chief Investment Office WM
Phone +41 44 234 50 62,


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