By John Revill

ZURICH (Reuters) – Swiss industry is struggling with falling orders and sales as weaker European demand and a strong franc hit exporters, with two surveys showing companies gloomy about their prospects.

Escalating trade tensions, with the possibility of higher export tariffs when U.S. President-elect Donald Trump takes office next year is also raising concerns in Switzerland.

Swissmem, whose members include ABB and Siemens, said sales of Swiss industrial products fell by 4.2% in the first nine months of 2024, while exports were 3.6% lower.

The mood was grim at smaller Swiss manufacturing companies, with a business climate index by another industry association, Swissmechanic, falling to its lowest level since January 2021.

Nearly three quarters of companies see the current business environment as unfavourable, with only 1% positive, a third quarter survey by Swissmechanic found.

It said capacity use at small Swiss manufacturing companies is now 81%, the lowest level since January 2021. Manufacturing is a cornerstone of the Swiss economy, contributing nearly 18% of the country’s economic output.

Companies are quite pessimistic at the moment,” said Swissmechanic director Juerg Marti, adding that around a third of small Swiss industrial companies have cut jobs and others could follow.

“The strong franc is causing them problems, and then there is the downturn in Germany which is also hurting. There are also a lot of geopolitical uncertainties which is making the situation worse,” Marti added.

Swissmem said that although there was a slight improvement in its figures during the third quarter, this did not point to a recovery as they were compared with weak figures a year earlier.

In the best-case scenario, we can expect a stabilisation next year,” said Swissmem director Stefan Brupbacher, adding that any trade war between the U.S., China and the EU would be another drag on the export-driven Swiss tech sector.

(Reporting by John Revill; Editing by Alexander Smith)