Companies take an increasingly pessimistic view of the situation
The partial shutdown of the Swiss economy due to the Corona pandemic is leaving an ever deeper mark on the Swiss economy. In a survey conducted by the business umbrella organization Economiesuisse, 85 percent of companies stated that their situation had deteriorated in the last three weeks.
Both the domestic and export sectors have had to accept considerable losses, according to the Economiesuisse press release. Compared with the end of March, sales losses had already risen from an average of 25 percent to 39 percent. Nevertheless, the companies do not expect any further deterioration in the next two months.
Secondary effects
On the one hand, companies that are integrated into the international value chains would suffer - Economiesuisse cites suppliers to the automotive industry or the luxury goods industry as examples. At the national level, suppliers of businesses that are currently closed, such as the catering or event industry, would be hit hard.
Secondary effects in areas not directly affected were also becoming increasingly apparent. For example, many companies are currently only spending what is absolutely necessary. Investment activities and projects not directly necessary for operations - such as advertising or consulting - are being postponed. Likewise, fewer new investments in plant and construction were recorded.
Normalization in half a year
The economy will need time to recover even after full opening, the trade association said. Companies still expect the situation to return to normal only in six to seven months.
The biggest problem is likely to be demand shortfalls at home and abroad: 70 percent of the economic sectors in the survey expected sales difficulties at home in the next two months, and 58 percent of the responding export companies also expected such difficulties abroad.
Criticism of Federal Council
At least the responses also showed that the measures taken by the Federal Council - i.e. liquidity assistance and short-time working compensation - were having an effect: Fear of future liquidity problems had already decreased significantly. In addition, the proportion of companies expecting redundancies had fallen from 30 to 17 percent compared with the last survey.
Nevertheless, dissatisfaction with the Federal Council's measures has increased since the last survey. Almost half of the respondents gave them a negative assessment, and the figure was even significantly higher in Western Switzerland, Economiesuisse noted. Above all, companies are calling for easing measures and clear prospects for starting business.
The survey was conducted by Economiesuisse together with the State Secretariat for Economic Affairs (SECO) from April 9 to 15, 2020. According to the survey, 281 people took part.
A KOF economic survey published on Friday, which was conducted in the first half of April, shows a similar picture: many companies were preparing for a significant drop in demand in the coming weeks, the KOF also said. (SDA)
