Export sentiment weakens further in Q4 2019

Export growth appears to be stalling towards the end of the year. The export sentiment values from Switzerland Global Enterprise (S-GE) as well as the Credit Suisse export barometer are indications that exports of goods and services are unlikely to increase further for the time being, although a decline in exports is not expected. According to the latest S-GE survey, although 47% of all SMEs expect exports to increase in Q4 2019 as well, the figures are at their lowest level in three years. The Credit Suisse Export Barometer has fallen to virtually zero.

Various uncertainties cloud export sentiment

Both the uncertainties surrounding the trade dispute between the US and China and the Brexit are causing problems for industrial companies, according to the export barometer. The composite purchasing managers' index (manufacturing and non-manufacturing) for the eurozone is at its lowest level in more than six years, according to Credit Suisse. This suggests a further weakening of demand from the eurozone - Switzerland's most important trading partner. At the same time, fears are intensifying that the decline in industry could also spread to the service sector and the labor market in Europe. Until now, the indicators for the service sector and the labor market had prevented economists from speaking of an impending recession.

MEM industries particularly affected

The ongoing global uncertainties are hitting the Swiss MEM industries particularly hard. MEM exports are down year-on-year in almost all major markets. Only exports to the USA increased slightly in the 3rd quarter of 2019. In contrast to the trends in Europe, namely in the USA the industrial and services PMIs improved again in September. However, these remained at a relatively low level only slightly above the growth threshold.

Source: Switzerland Global Enterprise