MEM sector is at the beginning of a post-crisis boom
In July, for the first time in two years, the majority of SMEs surveyed in the MEM sector assessed the business climate as positive. This is shown by the Swissmechanic Business Barometer of August 2021.
According to the latest quarterly survey of member companies of the industry association Swissmechanic, the MEM sector is at the start of a post-crisis boom. With the vast majority (75 percent) of respondents now assessing the situation as positive or rather or very favorable, it can be said that after two years in the red, the Swissmechanic Business Climate Index turned clearly into the green in July 2021. Still in April this year less than half (46%) saw the future as rosy, even though greater optimism was already emerging at that time.
SME-MEM on course for expansion
The fact that the recovery in the MEM sector continued to gain momentum in the second quarter of 2021 can be seen from the following indicators: new orders and sales rose sharply compared with the same quarter of the previous year (2020 Q2), partly due to the sharp slump a year earlier. The same applies to MEM exports; here Swissmechanic is talking about a record-breaking increase. A new trend reversal is also emerging in margins and personnel in the second quarter, this as a further finding of the survey. Capacity utilization rose to 92 percent in July 2021 and is thus higher than before the start of the pandemic.
MEM sector continues to face supply chain problems
Supply chain problems and labor shortages are currently ahead of order shortages on the list of concerns. According to the member companies surveyed, by far the biggest supply chain issues are availability, delivery times and prices of raw materials (e.g. metals) and intermediates (e.g. microchips). The shortage of intermediate products should primarily be seen as a symptom of the (global) race to catch up and the shift in consumption and production patterns, Swissmechanic writes in this regard. For example, the digitalization push caused by the pandemic has played a significant role in the microchip shortage.
Long-running issue: overregulation and a flood of regulations
Despite the problems in the supply chain area, the still young boom in the MEM sector is expected to continue this year and next. In order for the MEM SMEs to achieve a higher (structural) growth path in the long term, their framework conditions must be improved, the MEM SME industry association further states, and promises to continue to lobby for this cause in Federal Berne. The numerous regulations and the ever-increasing flood of paragraphs would increasingly restrict individual initiative and entrepreneurship and slow down the productivity and competitiveness of companies. This has a negative impact on innovation and jobs, Swissmechanic added. "Switzerland is permanently losing its attractiveness as a business location. This must not be allowed to happen. Therefore, Swissmechanic supports the introduction of a regulatory brake as well as all measures that contribute to relieving companies of regulatory costs. This benefits the Swiss workplace and thus society as a whole," reads the corresponding media release.
Source: Swissmechanic
