Panorama 2012 Facts and figures
Swiss mechanical and electrical engineering industries
2
Key figures
Contents Panorama 2012
8
8
Overview of 2011 business year for the MEM industries
9
New orders received by the MEM industries
10
Turnover of the MEM industries
11
Capacity utilization of the MEM industries
12
Exports of the MEM industries
16
Balance of trade in goods
17
Industrial workforce
The BRIC countries
1
The MEM industries in a national context
6
The growth dynamic of the BRIC countries is impressive. The strong need to close the technological gap and the rising consumption of an ever-broader middle class make these countries attractive as sales markets for manufacturers.
Brazil
Russia
20
Design und Layout Victor Hotz AG, Lasting Impressions in Print, Steinhausen Printing Victor Hotz AG, Lasting Impressions in Print, Steinhausen (Printed in a climate-neutral manner on paper that was manufactured without chlorine) Photographs Swissmem
18
22
3
Production and location factors 28
28
Exchange rate index
28 Swiss franc exchange rate 29 Labour costs in the manufacturing sector 2010 30 Innovation ranking 31
Expenditure on research and development
31
R&D personnel by sector
32
Energy consumption of Swissmem members
32
CO2 emissions of Swissmem members
33
European industrial electricity prices 2011
34 Overall Swiss strike statistics
4
Industry sector structure 35
35
Company size structure
36 Workforce structure by gender and area of activity 37
India
Trainees
China
5
The MEM industries in an international context
24
26
38
Swiss industries’ headcount abroad
38 Headcount of industry overall by global region 39 Headcount of foreign industrial companies in Switzerland 40 Foreign capital holdings of Swiss industry by global region 41
Capital holdings of foreign companies in Switzerland
42 Key machinery-exporting countries in 2010 42 Rankings in selected product areas 43 Machinery exports per capita
38
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Our areas of focus Swissmem represents the interests of around 1,000 companies in the Swiss mechanical and electrical engineering industries (MEM industries) as well as those in related technology-oriented sectors vis-à-vis economic, political and public audiences.
Services Professional advice free of charge from specialists, a first-rate training offering and a low-cost compensation fund: Swissmem provides its services to strengthen Switzerland as a place for industry and research.
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Representation Based on its broad industry expertise, Swissmem campaigns for the best possible regulatory parameters in the interests of the international competitiveness of Swiss industry. Networking Cooperation and professional exchanges of ideas and views in 23 specialist divisions, various local discussion groups and specialist committees: Swissmem creates strong net works with a view to ensuring long-term success.
Swissmem Panorama 2012 – Editorial
5
for 2012. They are anticipating that GDP will stagnate or even decline slightly. These factors will weigh further on the MEM industries.
Hans Hess, President of Swissmem
MEM industries will emerge stronger from the crisis – interview with Hans Hess The global economic crisis of 2008/09 was followed by a debt crisis in many countries around the world. The Swiss mechanical and electrical engineering industries (MEM industries) have been grappling with major challenges over the last few quar ters. The strong franc – a result of the high indebtedness of many national governments – and declining margins have been weighing on companies. In an interview, Swissmem President Hans Hess explains how he sees the situation of the MEM industries, and what he believes the future holds for them. Hans Hess, what will you remember 2011 for? 2011 was a difficult year for the Swiss mechanical and electrical engineering industries. In the second half of the year in particular, the negative impact of the strong franc really made itself felt. The blackest moment was without doubt in August, when it looked as if the eu ro’s value would simply evaporate from a Swiss perspective. This was a critical moment for the entire export industry, and we really did fear the worst. What were the greatest challenges? Many companies had to make major price concessions in order to benefit from what was still a healthy demand situation, despite the currency problem. This had immediate repercussions for profit margins. As a result, many companies simply stopped making money. They drew on the entire spectrum of corporate instruments to cushion the negative ef fects, yet the efficiency increases they achieved were continually being nullified by the relentless appreciation of the Swiss franc. Only when the Swiss National Bank stepped in to set an exchange rate floor of 1.20 francs to the euro did a degree of calm return;
this step gave companies a degree of planning security, and saved thousands of jobs in Switzerland at least tempo rarily. But the adjustment process is far from complete. What surprised you the most? Companies from the MEM industries reacted very quickly to the strong franc, resorting to countermeasures at operating level at an early stage. Moreover, they displayed an astonishing degree of resilience, which makes me optimistic for the future. What can MEM companies expect in 2012? I’m expecting the economic environment to remain difficult for the time being. Until the eurozone countries find a per manent way out of the debt crisis, it is extremely unlikely that the Swiss franc will depreciate in any meaningful way. So the EUR/CHF exchange rate is likely to remain within a bandwidth of 1.20– 1.25 in 2012. For many companies, this is likely to mean further declines in margins. The forecasts for economic development in the EU, the destination of 60 percent of MEM industry exports, are likewise not very encouraging
How would you assess the medium-term and long-term development of the Swiss MEM industries? The situation in the MEM industries will remain difficult, but we won’t see deindustrialization. Companies have responded to the challenge, and are working every day to improve their inter national competitiveness. They will pursue this road consistently, and will continually adapt to changing parameters. The adjustment process will remain painful, but I’m confident that the Swiss export industry overall will emerge from this “crash diet” in better shape than before. What are you expecting from policy makers on the legislative side? I’m expecting the decisions made by Swiss policymakers to strengthen the competitiveness of the Swiss export industry. The companies of the MEM industries compete on a global playing field. In addition to entrepreneurship and innovation, politico-economic para meters have a lasting effect on their international competitiveness too. There will be a large number of political decisions made during the 2012–2015 legislative period that will have a direct or indirect impact on the international competitiveness of the Swiss MEM industries. Indeed, some of these might even pose a dramatic threat to the competitive advantages offered by Switzerland as a manufacturing location. What is Swissmem itself doing on behalf of its members? Swissmem continues to lobby at all levels on behalf of the MEM industries and its member companies. Both I and the entire Swissmem team want to ensure that the MEM industries will be able to deliver added value, create jobs, and export successfully in the future too.
Swissmem Panorama 2012 – The MEM industries in a national context
6
1 | The MEM industries in a national context
Workforce in Switzerland 2011 Full-time equivalents
Other sectors 14%
Education 5%
MEM industries 11%
Other manufacturing 8% Energy and water supply 1%
Business-related services 11%
Construction 9% Hotels and restaurants 5%
Healthcare and social services 6% Public administration 4%
Transport and communications 5% Financial and insurance services 6% Trading and automotive 15%
Source: Besta As per NOGA classifications 2008
Added value in Switzerland 2011 Sectors in %
Business-related services 18%
MEM industries 9% Other manufacturing 10% Energy and water supply 2%
Community and personal services 21%
Construction 6%
Trading and automotive 13% Agriculture and forestry 1% Financial and insurance services 12%
Source: BAK As per NOGA classifications 2002 Real added value
Hotels and restaurants 2% Transport and communications 6%
Swissmem Panorama 2012 – The MEM industries in a national context
7
Total Swiss goods exports 2011 Sectors in %
Other sectors 8% Foodstuffs 4% Watches 10% Textiles 2% Electricity 3% Other chemical products 7%
Pharma 31%
Mechanical engineering 13% Precision instruments 7% Electrical engineering, electronics 6% Metalworking 7% Vehicles 2%
Share of MEM industries: 35%
Source: OZD
Did you know that …
Of all Swiss goods exports to the BRIC countries, MEM products account for
45% of the total.
A significant pillar of the Swiss economy
The MEM industries are responsible for 9.2% of Swiss added value and account for 35% of all goods exports. They employ more than 10% of the workforce in Switzerland, including some 10,000 trainees. This makes the MEM industries an important pillar of the Swiss economy. Over the last 10 years, the secondary sector of the economy has recorded personnel growth of 2.7% overall. Only the tertiary sector has increased more strongly over the same period (11.4%). Within the manufacturing sector, the MEM industries represent the largest sub-sector, accounting for more than 57% of manufacturing staff and 48% of industrial added value. Fur thermore, alongside the chemical-pharmaceutical industry, the MEM industries represent Switzerland’s key export sector.
Since 2000, MEM industry exports have risen from CHF 59 billion to CHF 68 billion, reaching a record high of CHF 80 billion in 2008. Over the same period, Switzerland’s total good exports rose from CHF 127 billion to CHF 198 billion.
Swissmem Panorama 2012 – Key figures
8
2 | Key figures
Overview of 2011 business year for the MEM industries 2009
2010
2011
Change in %
New orders 1)
85.3
99.3
98.8
– 0.5
Of which domestic
75.7
89.1
87.8
– 1.5
Of which foreign
88.9
102.7
102.6
– 0.1
Turnover 1)
99.5
98.5
100.6
2.1
Of which domestic
99.9
107.2
114.2
6.5
Of which foreign
99.4
96.0
96.8
0.8
79.0%
82.5%
89.6%
Capacity utilization 2) MEM industries Exports 3) Metallurgical industry
million CHF
10 487.7
12 738.5
13 023.6
Mechanical engineering and vehicle construction
million CHF
27 789.0
28 214.6
29 725.9
5.4
Electrical engineering/electronics
million CHF
11 329.3
12 234.4
11 781.8
– 3.7
Precision instruments
million CHF
13 839.8
14 394.7
14 010.5
– 2.7
Total Exports
million CHF
80 086.3
67 581.5
68 541.8
1.4
35.2%
34.9%
34.7%
Proportion of overall Swiss exports
1.4
Domestic turnover 4) Total
million CHF
19 489.9
19 501.6
21 172.6
8.6
Total goods turnover of MEM industries
million CHF
82 935.7
87 060.6
89 714.4
3.0
332 411
329 426
337 809
2.5
Full-time employees 5) MEM industries total * S ources: 1) 290 Swissmem reporting members (indexed) 2) KOF/ETH, annual average 3) OZD 4) based on export ratio (2011: 76.4%) of Swissmem reporting companies; excluding services 5) BFS (BESTA), including people employed in the watchmaking industry
2011: Strength of franc weighs on economic recovery in MEM industries
In the second half of 2011, the signs of recovery that had become apparent were brought largely to a standstill by the strength of the franc. A further negative factor was the noticeable slowdown in the global economy. Despite a good first quarter, the level of new orders received by the MEM industries in 2011 came in slightly below that of the previous year (–0.5%). In the fourth quarter, indeed, order intake slumped by 18.6% in a year-on-year comparison. Despite high levels of new orders in late 2010 and early 2011, the MEM industries’ sales rose only moderately last year
(+2.1%), which on average puts them more than 20% below pre-crisis levels. The disadvantageous currency situation forced companies to take rapid and in some cases drastic action. Many companies were forced to offer massive price concessions in order to main tain their competitiveness in the export business. Export prices declined by a hefty 4.1% in 2011 alone, which had a direct impact on margins. This has driven over a third of MEM companies into an operational loss.
Swissmem Panorama 2012 – Key figures
9
New orders received by the MEM industries 45%
200
35%
180
25%
160
15%
140
5%
120
0%
100
– 5%
80
– 15%
60
– 25%
40
– 35%
20
– 45%
2002
2003
2004
Change in %
2005
2006
2007
2008
2009
2010
2011
0
Index of total new orders received
Source: 290 reporting Swissmem companies Indexed, Q1 2001 = 100
New orders received by the MEM industries Year/Quarter
Total
in % prev. year
Of which domestic
Of which foreign
Export rate in %
2001
90.5
–
–
–
75.2
2002
81.3
– 10.2
–11.1
– 9.8
74.0
2003
83.6
2.8
–0.4
3.9
74.9
2004
89.5
7.1
–6.9
11.6
78.3
2005
93.5
4.5
6.5
3.8
78.8
2006
112.3
20.1
10.3
22.0
81.1
2007
137.3
22.3
25.8
21.3
80.5
2008
113.8
– 17.1
–7.5
– 19.4
78.3
2009
85.3
– 25.0
–17.7
– 27.0
76.5
2010
99.3
16.4
17.7
15.5
77.6
2011
98.8
– 0.5
– 1.5
– 0.1
76.4
2011 I
118.8
27.3
39.5
24.1
76.0
2011 II
100.0
– 2.6
– 9.7
– 0.1
76.8
2011 III
86.1
– 4.9
– 15.0
– 2.3
76.4
2011 IV
90.1
– 18.6
– 16.0
– 18.9
76.2
Source: 290 reporting Swissmem companies Indexed, Q1 2001 = 100
Swissmem Panorama 2012 – Key figures
10
Turnover of the MEM industries 25%
200
20%
180
15%
160
10%
140
5%
120
0%
100
– 5%
80
– 10%
60
– 15%
40
– 20%
20
– 25%
2002
2003
2004
Change in %
2005
2006
2007
2008
2009
2010
2011
0
Index of total new orders received
Source: 290 reporting Swissmem companies Indexed, Q1 2001 = 100
Turnover of the MEM industries Year/Quarter
Total
in % prev. year
Of which domestic
Of which foreign
2001
100.9
–
–
–
2002
89.1
– 11.7
– 8.3
– 12.8
2003
85.7
– 3.8
– 3.9
– 3.8
2004
90.7
5.8
4.3
6.4
2005
93.4
3.0
– 0.9
4.3
2006
103.6
10.9
4.5
12.9
2007
118.0
13.9
14.8
13.6
2008
124.8
5.8
6.3
5.6
2009
99.5
– 20.3
– 16.6
– 21.2
2010
98.5
– 1.0
7.3
– 3.4
2011
100.6
2.1
6.5
0.8
2011 I
97.8
2.7
12.4
0.2
2011 II
101.9
4.6
1.6
5.5
2011 III
99.6
4.1
5.6
3.8
2011 IV
102.9
– 2.5
7.6
– 5.6
Source: 290 reporting Swissmem companies Indexed, Q1 2001 = 100
Swissmem Panorama 2012 – Key figures
11
Capacity utilization of the MEM industries 95%
90%
85%
80%
75%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: KOF
Did you know that …
86.3%
is the long-term, average capacity utilization of the MEM industries.
Stagnating sales
Whereas negative developments were already apparent in new orders by the second quarter of 2011, moderate growth continued to be recorded at sales level for a further two quar ters. In the fourth quarter, turnover declined by 2.5% yearon-year. Turnover for 2011 as a whole was up 2.1%. Viewed in overall terms, sales development has stagnated since the slump of 2008, with the strength of the franc preventing any meaningful upward surge. The average capacity utilization of companies in the MEM industries last year was 89.6%. This is somewhat higher than the long-term average of 86.3%. A low point was reached at the end of 2009, when capacity utilization amounted to just 76.4%.
Companies in the MEM industries are heavily exposed to inter national economic cycles due to their strong export focus, which in turn means that capacity utilization is continually prone to substantial fluctuations. Short-time working and the temporary introduction of longer working hours are important instruments for companies in the MEM industries as they seek to respond to increasingly rapid changes in economic developments.
Swissmem Panorama 2012 – Key figures
12
Exports of the MEM industries Share of economic regions in %
Oceania 1% Asia 20%
Latin America 2% North America 11%
EU 27 60%
Africa 2% Other Europe 4%
Source: OZD
Did you know that ...
In rankings by sales market, China is now
no. 3. Ten years ago, it was ranked 10.
BRIC countries and Germany as drivers of growth
In 2011, the companies in the MEM industries exported goods with a value of CHF 68.5 billion, a year-on-year rise of 1.4%. There was a sharp slowdown in export momentum in the final quarter of the year in line with the sluggish development of the global economy. The year-on-year decline in exports in the fourth quarter of 2011 amounted to 4.3%. Positive stimuli came from the BRIC countries and the US. Exports to Brazil rose by 6.6%, to Russia by 17.7%, to China by 14.2%, and the US by 3.4%. Only the export business with India ran counter to this trend (–1.9%). The BRIC countries have gained considerable importance over the last 10 years, with exports more than tripling during this period. The BRIC countries share in the overall export
volumes of the MEM industries has increased from 4.2% to 10.9% over this timeframe. This trend looks set to continue over the next few years. Sales to the EU, the destination of some 60% of products of the MEM industries, declined by 1.3% last year. Exports to the southern countries of the EU and to the Benelux region dec lined in particular, falling dramatically in some cases. One sales market that managed to buck this trend was Germany, which witnessed a rise in exports by the MEM industries of 3.2%. With a 27% share of exports, Germany remains easily the largest market.
Swissmem Panorama 2012 – Key figures
13
Exports of the MEM industries Shares by country
2009
2010
2011 million CHF
share in %
∆ in % to prev. year
65.0
43 781.7
63.9
– 0.3
26.4
18 427.5
26.9
3.2
6.8
4 254.6
6.2
– 6.9
3 496.6
5.2
3 379.9
4.9
– 3.3
4.8
3 259.2
4.8
2 633.8
3.8
– 19.2
3.8
2 366.1
3.5
2 380.8
3.5
0.6
1 937.4
3.1
2 201.0
3.3
2 317.4
3.4
5.3
Belgium
1 440.3
2.3
1 454.0
2.2
1 388.0
2.0
– 4.5
Spain
Country
million CHF
share in %
million CHF
Europe *
41 989.5
66.2
43 912.5
Germany
16 503.2
26.0
17 860.1
France
4 556.4
7.2
4 568.5
Italy
3 435.5
5.4
Netherlands
3 025.2
UK
2 437.7
Austria
share in %
1 450.6
2.3
1 393.6
2.1
1 232.7
1.8
– 11.5
Russia
698.1
1.1
777.7
1.2
915.2
1.3
17.7
Poland
717.7
1.1
829.9
1.2
838.7
1.2
1.1
Sweden
722.6
1.1
755.4
1.1
822.7
1.2
8.9
Czech Republic
657.2
1.0
770.6
1.1
784.3
1.1
1.8
Turkey
442.1
0.7
661.6
1.0
733.2
1.1
10.8
Other
3 965.5
6.3
3 518.2
5.2
3 672.9
5.4
4.4
Asia
11 177.1
17.6
12 895.4
19.1
13 839.8
20.2
6.0
China
2 865.4
4.5
4 179.6
6.2
4 774.3
7.0
14.2
Japan
1 094.7
1.7
1 204.1
1.8
1 298.7
1.9
7.9
924.3
1.5
1 065.5
1.6
1 059.0
1.5
– 0.6
India
973.8
1.5
1 050.8
1.6
1 030.6
1.5
– 1.9
United Arab Emirates
653.4
1.0
499.6
0.7
848.0
1.2
1.2
Singapore
616.6
1.0
724.0
1.1
640.2
0.9
– 11.6
Taiwan
390.8
0.6
577.4
0.9
640.1
0.9
10.9
Hong Kong
444.7
0.7
552.1
0.8
582.4
0.8
5.5
Other
3 213.4
5.1
3 042.3
4.5
2 966.5
4.3
– 2.5
Americas
7 878.5
12.4
8 615.5
12.7
9 021.8
13.2
4.7
USA
5 765.6
9.1
6 389.1
9.5
6 606.8
9.6
3.4
Brazil
587.4
0.9
712.3
1.1
759.3
1.1
6.6
Canada
429.1
0.7
446.6
0.7
542.1
0.8
21.4
Mexico
385.8
0.6
433.0
0.6
372.6
0.5
– 14.0
Other
710.6
1.1
634.5
0.9
741.0
1.1
16.8
Africa
South Korea
1 630.0
2.6
1 345.9
2.0
1 245.8
1.8
– 7.4
South Africa
274.5
0.4
338.8
0.5
391.4
0.6
15.5
Algeria
355.9
0.6
278.3
0.4
206.3
0.3
– 25.9
Other
999.6
1.6
728.8
1.1
648.1
0.9
– 11.0
Oceania
770.8
1.2
812.3
1.2
820.2
1.2
1.0
Australia
705.3
1.1
695.3
1.0
739.9
1.1
6.4
65.5
0.1
117
0.2
80.3
0.1
– 31.4
63 445.8
100.0
67 581.5
100.0
68 541.8
100.0
1.4
Other MEM industries total
Source: OZD * Europe: EU27 & rest of Europe
Swissmem Panorama 2012 – Key figures
14
Exports of the MEM industries Share of product fields
Vehicles 7%
Metalworking 19%
Mechanical engineering 37%
Electrical engineering, electronics 17% Precision instruments 20% Source: OZD
Did you know that …
12.6%
of all exports of the MEM industries are accounted for by medical instruments and apparatus. Ten years ago the equivalent figure was just 7.2%.
Disparities in the performance of different product areas
A year-on-year comparison of exports by the MEM industries’ subsectors reveals certain disparities in development. The metals and metal products and mechanical engineering sectors registered positive growth rates of 2.2% and 3.6% respectively. By contrast, sales in the electrical engineering and electronics and precision instruments areas declined by 3.7% and 2.7% respectively. With a share of some 36.6%, mechanical engineering is by far the most significant production area of the MEM industries. In recent years, there has been a strong increase in the pro duction of precision instruments. Production in this area has increased by a total of 5.4% since 2000.
Where the individual products are concerned, medical instru ments and apparatus are the most important area, with exports amounting to CHF 8,614.2 million. Although there was a 4.9% decline in exports last year, the growth rates remain impressive when viewed over a longer period: Since 2000, when a figure of CHF 3,648.1 million was recorded, exports have increased by 136%.
Swissmem Panorama 2012 – Key figures
15
Exports of the MEM industries Share of product fields
Product Mechanical engineering
2009
2010
2011
million CHF share in %
million CHF share in %
million CHF share in %
∆ in % to prev. year
22 432.2
35.4
24 200.6
35.8
25 072.8
36.6
3.6
Machine tools for metalworking
2 765.5
4.4
3 133.1
4.6
3 808.8
5.6
21.6
Pumps, compressors, fans
2 286.7
3.6
2 542.0
3.8
2 489.2
3.6
– 2.1
670.6
1.1
1 637.3
2.4
2 070.5
3.0
26.5
Turbines, power plants, etc.
2 783.5
4.4
2 229.0
3.3
1 953.4
2.8
– 12.4
Graphic machinery
1 568.1
2.5
1 748.5
2.6
1 529.6
2.2
– 12.5
876.2
1.4
1 316.7
1.9
1 476.2
2.2
12.1
Heating and refrigeration technology
1 370.0
2.2
1 332.8
2.0
1 324.7
1.9
– 0.6
Household appliances
Apparatus and equipment for semiconductors
Textile machinery
1 088.7
1.7
1 053.6
1.6
1 033.2
1.5
– 1.9
Packaging and filling machinery
809.0
1.3
884.7
1.3
926.5
1.4
4.7
Office machinery
941.1
1.5
943.7
1.4
920.5
1.3
– 2.5
Lifting and handling equipment
707.7
1.1
696.2
1.0
791.5
1.2
13.7
Plastics machinery
640.6
1.0
776.4
1.1
775.1
1.1
– 0.2
694.1
1.1
650.5
1.0
743.4
1.1
14.3
3 319.1
5.2
3 142.2
4.6
3 032.6
4.4
– 3.5
Food processing machinery Other Precision instruments, apparatus and devices
13 839.8
21.8
14 394.7
21.3
14 010.5
20.4
– 2.7
Medical instruments and apparatus
9 104.1
14.3
9 059.5
13.4
8 614.2
12.6
– 4.9
Mech. Instruments for measuring, testing
3.0
3 324.6
5.2
3 660.8
5.4
3 771.6
5.5
Optical appliances
898.4
1.4
1 037.6
1.5
1 067.5
1.6
2.9
Survey instruments
512.7
0.8
636.8
0.9
557.2
0.8
– 12.5
Electrical engineering/electronics
11 329.3
17.9
12 234.4
18.1
11 781.8
17.2
– 3.7
Electrical switchgear and cables
3 421.4
5.4
3 802.8
5.6
3 647.3
5.3
– 4.1
Power generation apparatus and electric
2 774.2
4.4
2 952.3
4.4
2 956.2
4.3
0.1
batteries, etc.
2 143.6
3.4
2 129.0
3.2
2 085.9
3.0
– 2.0
Electrical and electronic components
1 577.1
2.5
1 946.0
2.9
1 791.3
2.6
– 7.9
Controlling, signalling and meas. instruments
679.7
1.1
687.1
1.0
685.0
1.0
– 0.3
Telecommunication equipment
733.4
1.2
717.3
1.1
616.0
0.9
– 14.1
Electrical apparatus such as magnets,
Metals
10 487.7
16.5
12 738.5
18.8
13 023.6
19.0
2.2
Non-ferrous metals
1 654.4
2.6
2 349.2
3.5
2 464.6
3.6
4.9
Machine components
1 927.1
3.0
2 345.9
3.5
2 419.3
3.5
3.1
Tools and moulds
1 819.8
2.9
2 035.4
3.0
2 041.6
3.0
0.3
Other
5 086.4
8.0
6 008.0
8.9
6 098.1
8.9
1.5
Vehicles
5 356.8
8.4
4 013.4
5.9
4 653.1
6.8
15.9
Road vehicles
1 846.4
2.9
1 975.7
2.9
2 109.3
3.1
6.8
Aircraft and spacecraft
2 418.2
3.8
1 377.3
2.0
1 603.2
2.3
16.4
Rolling stock
1 073.9
1.7
642.4
1.0
912.0
1.3
42.0
18.3
0.1
18.0
0.1
28.6
0.1
58.9
63 445.8
100.0
67 581.5
100.0
68 541.8
100.0
1.4
Other MEM industries total
Source: OZD
Swissmem Panorama 2012 – Key figures
16
Balance of trade in goods in CHF million
« Import surplus
Export surplus » Precision instruments Vehicles Electrical engineering/electronics Metallurgical industry Mechanical engineering Watches Pharma Textiles Energy sources Foodstuffs All goods
– 20 000
– 10 000
0
10 000
20 000
30 000
40 000
Source: OZD
Swiss balance of trade strongly positive
With the exception of the year 2000, Switzerland has consisten tly recorded a surplus in its exchange of goods with other countries since 1993. Since goods exports rose once again in 2011 by 2.1%, while imports declined by 0.2%, a record surplus of CHF 23.8 billion in goods trading was recorded last year. Of the various product groups, it was mainly the pharma and watchmaking industries that recorded very positive net balances last year. Overall, the MEM industries recorded a slight import surplus. The strongest contributor to this negative balance of trade in 2011 was the import of passenger vehicles with a total value of more than CHF 11 billion. Slightly higher imports than exports were likewise recorded in the metallurgical industry, while the electrical engineering/
electronics, mechanical engineering, and precision instruments areas all recorded positive trade balances. With more than 330,000 full-time employees, the MEM indus tries remain the largest manufacturing employer in Switzer land. Over the last 10 years, headcount in these industries has risen slightly. By contrast, Swiss manufacturing industry as a whole has seen a slight reduction in headcount.
Swissmem Panorama 2012 – Key figures
17
Industrial workforce Sectors in %
Other manufacturing industry 8% Rubber and plastics 6%
Metallurgical industry 15%
Textiles 2% Wood/graphic industry 11%
Machinery and tools 20%
Foodstuffs 9% Pharma 6%
Electronics 6% Data processing/watches 17%
Source: Besta
Industrial workforce Industrial Workforce
MEM industries
Year
Employees
∆ in %
Employees
∆ in %
share in %
2000
593 172
1.5
333 656
2.3
56.2
2001
599 832
1.1
333 261
1.7
55.6
2002
583 211
– 2.8
321 113
– 3.6
55.1
2003
561 911
– 3.7
308 149
– 4.0
54.8
2004
560 959
– 0.2
310 044
0.6
55.3
2005
562 525
0.3
311 432
0.4
55.4
2006
576 983
2.6
324 245
4.1
56.2
2007
594 608
3.1
339 363
4.7
57.1
2008
614 816
3.4
355 799
4.8
57.9
2009
582 417
– 5.3
332 411
– 6.6
57.1
2010
579 163
– 0.4
329 426
– 0.9
56.8
2011
585 475
1.1
337 887
2.2
57.7
Source: BESTA
Emerging giants The economic development of what are known as the BRIC countries has been impressive, and their increasing influence as players in global trade is shifting the global equilibrium.
The acronym “BRIC” was first coined a decade or so ago to designate the four emerging markets with the potential to become leading players in the global economy over the next few decades. For one thing, around 40 percent of the world’s population live in the BRIC countries, while the share of global gross domestic product accounted for by these countries is 17 percent. The significant need of these countries to catch up on the technology front, the rising purchasing power of the BRIC consumer, and substantial domestic markets are all conducive to growth and make these countries appealing sales markets. But these four emerging nations can in no way be considered a homogeneous group. Whereas
Brazil
Population GDP
Russia
203 million USD 2,517.9 billion
Exports Switzerland to Brazil
CHF 2,225.9 mill.
Imports Brazil to Switzerland
CHF 915.7 mill.
Commodities and agricultural products Brazil possesses a wealth of commodity resources. In addition to iron ore, the country also exports significant quantities of agricultural products such as coffee, cocoa, fruit and sugar. Brazil’s manufacturing base produces vehicles and vehicle components, textiles, steel and other metals, cement and chemicals. Politico-economic challenges include the necessity of far-reaching reforms and the social structure of certain regions. Only a half of Brazil’s overall population is integrated into the formal economy. The country’s economic growth is proving fairly modest compared to that of China and India.
Population GDP
142.5 million USD 1,828.6 billion
Exports Switzerland to Russia CHF 3,008.9 mill. Imports Russia to Switzerland
CHF 492.4 mill.
Oil and gas The energy sector accounts for just under a third of Russia’s industrial production, making it the most important sector of the country’s economy. The country remains strongly depen dent on commodity exports, which means the economy is particularly exposed to price fluctuations in the commodity markets. Moreover, the wealth of Russian commodity deposits is threatening to become an obstacle to economic progress in other areas, as much-needed reforms are not pushed through with sufficient consistency. A further politico-economic challenge is the containment of bureau cracy and the battle against corruption.
Swissmem Panorama 2012 – BRIC
19
Brazil and Russia benefit heavily from demand for commodities, China and India can exploit their huge reservoirs of labour and very low labour costs. Political instability and inflation also pose risks to the development of these countries, however. The need for comprehensive market reforms coupled with the stuttering implementation of such reforms has the potential to hold back economic growth. Equally important is the question of how these countries will overcome their great social differences and structural imba lances, so that an ever-increasing proportion of the population can participate in the economic boom.
India
Population GDP
Legal uncertainties, complex and opaque legislation, bureau cracy, and high excise and tax levels likewise represent commercial obstacles for exporters to these countries. In order to facilitate market access and to take account of the increasing significance of these countries as trading partners for the Swiss economy, the Federal Department of Economic Affairs has drawn up country-specific foreign trade strategies for the BRIC countries. Negotiations on free trade agreements within the EFTA framework are already underway with China, India and Russia; discussions with Brazil are still at the preparatory phase.
China
1.21 billion
Population
1.338 billion
USD 1,843 billion
GDP
Exports Switzerland to India
CHF 2,935.2 mill.
Exports Switzerland to China
CHF 8,438.5 mill.
Imports India to Switzerland
CHF 1,042.2 mill.
Imports China to Switzerland
CHF 6,277.4 mill.
Information technology and textiles At the beginning of the 21st century, India turned itself into a centre of excellence for software and information technologies and also became a nuclear power. Compared to other emerging nations of Asia, India’s manufacturing sector is poorly developed, and is growing less strongly than the services sector. The key sectors of industrial production include chemicals, clothing, foodstuffs and beverages, metals and alloys, and electrical equipment. The current administration has set itself the target of further deregulating the Indian economy and strengthening market forces. The country is very backward in terms of its inf rastructure, where considerable investment is required. Problems include a high level of inflation and bureaucracy.
USD 6,988.5 billion
A powerhouse for mass-market products in pursuit of a high-tech future China’s enormous pool of labour gives the country a clear competitive advantage when it comes to work-intensive production processes in the manufacturing sector. China pos sesses a complete and modern industrial system; all industries – including steel and iron, chemicals, mechanical engineering, textiles, electronics, as well as air and space travel – are developed, but the country is increasingly gaining in importance as a production centre for cutting-edge tech nology. Costs are on the rise accordingly. China produces almost all the world’s output of so-called rare earths, which are essential for many high-tech products.
Brazil Thanks to a low dependency on foreign trade, Brazil has proved to be relatively crisis-resistant in recent years.
Swissmem Panorama 2012 – bric
21
Goods exports of the MEM industries to Brazil in CHF million 1200 1100 1000 900
587.4
528.0
460.2
378.7
200
463.4
300
451.5
400
431.7
500
520.6
600
712.3
726.5
700
759.3
800
100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total goods exports to Brazil 2011 Sectors in %
Watches 2%
Mechanical engineering 17%
Pharma 36%
Electrical engineering, electronics 5% Metallurgical industry 3% Vehicles 2% Precision instruments 6% Other chemical products 23%
Other goods 6% Total goods exports 2011: CHF 2,225.9 million
Brazil is Switzerland’s most important trading partner in Latin America by far. Chemical and pharmaceutical products together with machinery account for more than three quarters of all Swiss exports to Brazil. In return, Switzerland primarily imports agricultural and forestry products. For the MEM industries, Brazil ranks 19 th as a sales market in a global comparison. The Latin American country has a huge need to catch up in terms of the expansion of its infrastructure, which is permanently overburdened and thus a major factor behind the country’s limited economic growth. In recent years, Brazil’s public finances
have recovered to such an extent that the country is now spending increased sums of money on improving its infrastructure once more. In addition to the expansion of rail and road networks, investment is also required in electricity supply and to provide general access to water and drains, which even today are lacking in much of Brazil. Much of Brazil’s machinery is antiquated, while at the same time capacity utilization in the manufacturing sector remains above 85%. As a result, there are a number of interesting commercial opportunities for mechanical engineering companies.
Russia Interesting commercial opportunities are opening up for Swiss manufacturers in Russia, as the economy is in need of modernization, and both the Winter Olympic Games and the FIFA World Cup will be held there in coming years.
Swissmem Panorama 2012 – bric
23
Goods exports of the MEM industries to Russia in CHF million
1 126.9
1100 1000
1 163.7
1200
915.2
900
200
453.0
357.7
300
335.8
400
427.8
500
535.5
600
777.7
700
698.1
790.7
800
100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total goods exports to Russia 2011 Sectors in %
Other chemical products 6% Watches 8%
Mechanical engineering 16% Electrical engineering, electronics 5% Metallurgical industry 3%
Pharma 42%
Vehicles 1% Precision instruments 6% Other goods 13%
Total goods exports 2011: CHF 3,008.9 million
Exports by the MEM industries to Russia have surged dramatically in recent years, tripling over the last decade. Russia ranks in 14th place as an export sales market. Good opportunities are opening up for niche providers of high-tech products and manufacturers of exclusive luxury goods, who are benefiting from the fact that Russians tend to associate Swiss products with quality and exclusivity. Russia is investing a great deal in the modernization of its roads, transport infrastructure, hospitals, air travel, and information technology, as well as increasing investment in nanotechnology and energy
efficiency. The Russian government has argued that the Russian economy requires comprehensive modernization and needs to focus on building up a diversified economy based on high-level technology and innovation. Major investment in infrastructure and buildings will be required in the run-up to the 2014 Winter Olympics in Sotchi and the 2018 FIFA World Cup. This will present good commercial opportunities, including for Swiss SMEs. By contrast, bureaucracy and corruption should not be underestimated as ongoing obstacles to trade.
India India’s economic development is heavily dependent on the expansion of what is still a very poor infra structure. To achieve this expansion, the country will be reliant on technology and expertise from abroad.
Swissmem Panorama 2012 – bric
25
Goods exports of the MEM industries to India in CHF million
1 030.6
807.6
800
1 050.8
900
973.8
1 025.8
1000
1 093.2
1100
1 123.9
1200
700 600
200
437.0
373.2
300
427.0
400
559.2
500
100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total goods exports to India 2011 Sectors in %
Other chemical products 10%
Electrical engineering, electronics 6%
Watches 4% Mechanical engineering 19% Jewellery, precious metals 27% Pharma 20%
Metallurgical industry 4% Vehicles 1% Precision instruments 6% Other goods 3%
Total goods exports 2011: CHF 2,935.2 million
India currently ranks in 13th place as a sales market for the MEM industries. The lion’s share of the growth in Swiss exports to India has been generated by four sectors: chemicals, mechanical engineering, electronics, and precision instruments. This Asian country harbours interesting potential for investments in production and engineering. There is also significant development potential in areas such as infrastructure, health and the environment, among others. By contrast, the consumer goods market is not yet as appealing as those of other emerging nations. Switzerland has a very good reputation in
India, but its products are seen as expensive. Moreover, a low price is often more important to Indian companies than quality. Swiss exporters looking to gain a foothold in India therefore need to analyse their product spectrum carefully, and a certain degree of flexibility is required when dealing with existing structures. In addition, the administrative and legal parameters that apply to trade with India are complex and time-consuming.
China China’s significance as an export market for the MEM industries is growing dramatically, with the country now ranking in third place behind Germany and the US. China now has a diversified industrial base of its own.
Swissmem Panorama 2012 – bric
27
Goods exports of the MEM industries to China in CHF million
4500 4 179.6
4000
500
2 032.2
1 916.8
1 533.8
1000
1 242.5
1500
1 687.5
2 865.4
2000
2 327.6
2500
2 884.7
3000
3 088.8
3500
4 774.3
5000
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total goods exports to China 2011 Sectors in %
Other chemical products 4% Watches 19%
Precision instruments 7% Electrical engineering, electronics 8% Metallurgical industry 4% Vehicles 1%
Pharma 13% Mechanical engineering 37% Other goods 7% Total goods exports 2011: CHF 8,438.5 million
In 2011, China rose to become the MEM industries’ third-largest export destination. Growth rates over the last ten years are impressive, with exports having quadrupled during this period. Bilateral trade between China and Switzerland shows that the two countries are active with the same products in different price classes. However, China is clearly on the path to be coming a high-tech nation. The Chinese market is huge, and its complexity should not be underestimated. Geographic, ethnic, cultural and social considerations all need to be taken on board. Companies looking to move into China need time,
money, and a consistent focus on local customer needs. Average wages in the major Chinese conurbations have continued to rise in recent years, but they remain much lower than wages in Europe. Nonetheless, growing prosperity is making con sumers more discerning. This will lead to increasing demand for higher-quality goods for which Chinese consumers are perfectly willing to pay a higher price. Legal uncertainties, parti cularly in the area of protection of intellectual property, rank among the challenges.
Swissmem Panorama 2012 – Production and location factors
28
3 | Production and location factors
Exchange rate index 160
Appreciation of CHF «
150 140 130 120 110 100 90
«
80
2008 Real exchange rate indices
2009
2010
Depreciation of CHF
2011
Nominal exchange rate indices
Source: SNB Export-weighted index of currency exchange rates of major trading partners Indexed, Jan 1999 = 100
Swiss franc exchange rate Country
Currency
2009
Euro countries
1 EUR
USA
1 USD
United Kingdom Japan
Change over previous year in %
2010
2011
1.510
1.381
1.234
– 10.6
1.085
1.042
0.887
– 14.9
1 GBP
1.696
1.606
1.421
– 11.5
100 JPY
1.161
1.188
1.113
– 6.3
Brazil
1 BRL
0.547
0.592
0.531
– 10.4
Russia
100 RUB
3.425
3.436
3.020
– 12.1
India
100 INR
2.245
2.282
1.905
– 16.5
China
1 CNY
0.159
0.154
0.137
– 10.9
Source: SNB
Swissmem Panorama 2012 – Production and location factors
29
Labour costs in the manufacturing sector 2010 Euro
Euro
Euro
Norway
49.54
31.98
17.56
Switzerland
40.87
26.12
14.75
Belgium
39.31
19.79
19.53
Sweden
37.23
20.69
16.53
Denmark
36.58
27.02
9.56
West Germany 36.28
20.67
15.61
France
34.55
17.55
17.00
Germany
34.47
19.75
14.72
Netherlands
32.01
18.17
13.84
Finland
31.48
18.55
12.92
Austria
31.13
16.19
14.94
Luxembourg
30.16
20.37
9.79
Italy
25.82
14.50
11.32
Japan
25.49
14.33
11.16
USA
24.41
16.58
7.83
UK
23.10
16.60
6.51
Spain
21.58
11.65
9.93
Greece
16.57
9.55
7.02
9.32
5.22
4.09
Czech Republic Hungary
7.02
3.88
3.15
Poland
6.46
4.35
2.11
3.5
2.30
1.20
2.6
1.90
0.70
Romania Bulgaria
0
10
Hourly wage
20
30
40
50
Non-wage labour costs
Source: Institut der deutschen Wirtschaft, Cologne
2011 dominated by the strong franc
The strong rise in the value of the Swiss franc presented major challenges to companies from the MEM industries in 2011. Whereas one euro was worth almost 1.50 francs at the start of 2010, the two currencies were virtually at parity by the start of August 2011. The introduction of a floor of 1.20 francs for the euro by the Swiss National Bank then stabilized the situation and gave companies a degree of planning security. The low valuations of the euro and the dollar against the franc had direct repercussions for the international competitiveness of the MEM industries. Many companies had to make price concessions in their export business just to stay in the market. The erosion of margins was significant: More than 50% of MEM companies reported a margin loss of six or more percentage points at EBIT level. Around a third of MEM businesses
slipped into the operating loss zone. This disadvantageous currency situation for the export economy looks set to continue. At the same time, the strong Swiss franc also led to an increase in labour costs in an international comparison. This is proving an additional damper on Switzerland’s appeal as a business location. While hourly wage costs in Switzerland have traditionally been high, the last few years have also seen a rise in non-wage labour costs.
Swissmem Panorama 2012 – Production and location factors
30
Innovation rankings
Innovation as the elixir of life
Switzerland
In 2011, Switzerland once again topped the rankings of innovative nations in Europe. This was con firmed by the “Innovation Union Score board” of the EU Commission. A particular strength of Switzerland lies in international patent regis trations and the sale of new products. Indeed, it was even able to con solidate its position in this area. Areas where Switzerland performed less well in the comparative study were the financing of innovations and the establishment of networks.
Sweden Denmark Germany Finland Belgium United Kingdom Iceland Netherlands Austria Luxembourg Ireland France EU 27 Slovenia Cyprus Estonia Norway Italy Portugal
Research and development expenditure The MEM industries accounted for 28.5% of all Switzerland’s R&D expenditure in 2008. The research carried out by the sector had a clear domestic focus. Private business R&D spending abroad amounted to roughly CHF 18 billion, of which 88% was invested in the companies’ own operations.
Czech Republic Spain Hungary Greece Croatia Poland Romania Bulgaria Turkey 0
0,1
Source: Innovation Union Scoreboard 2011
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
42% of R&D personnel working in Swissmem member companies are university graduates. The proportion of technical staff grew 27% between 2004 and 2008, in parallel with higher expenditure on experimental de velopment (54% of R&D expenditure).
Swissmem Panorama 2012 – Production and location factors
31
Research and development expenditure R&D investment in Switzerland in 2008* Sectors in %
Other sectors 23%
Machinery, metal, high-technology instruments 28.5%
Foodstuffs 4.5%
Total: CHF 11,979 million MEM industries total: CHF 3,713 million
Chemicals/pharma 44%
* S ource: SFSO, 2010 (data gathered every 4 years). The MEM industries comprise metals, mechanical engineering, and high-technology instruments, as well as information and communication technologies Private sector only
R&D personnel by sector Researchers by sector in Switzerland in 2008* Sectors in %
Other sectors 36%
Foodstuffs 7%
Total in full-time equivalents: 11,081 Overall total of R&D personnel in full-time equivalents: 39,832 * S ource: SFSO/economiesuisse, 2010 (data gathered every 4 years). Specialists in planning and developing new knowledge, products and processes Private sector only
Machinery, metal, high-technology instruments 33%
Chemicals/pharma 24%
Swissmem Panorama 2012 – Production and location factors
32
Energy consumption of Swissmem members in terajoules = 280,000 kWh
Energy as a key locational factor
30 000 25 000 20 000 15 000 10 000 5000 0
’90 ’91 ’92 ’93 ’93 ’94 ’95 ’96 ’97 ’98 ’98 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 Total
Electricity
Gas
Petroleum products
Source: Swissmem
CO2 emissions of Swissmem members in tonnes of CO2 1 000 000 800 000 600 000 400 000 200 000 0
Source: Swissmem
’90 ’91 ’92 ’93 ’93 ’94 ’95 ’96 ’97 ’98 ’98 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 Total
Petroleum products
Gas
Coal/Coke
Swissmem member companies’ energy consumption in 2011 declined by 6.8% year-on-year. MEM companies have been making ongoing efforts to reduce costs in this area, which explains the very high reduction over the last two decades: In 2011, Swissmem member companies consumed 56.7% less energy than they did back in 1990. Over the same period, the MEM industries’ exports have risen by 75%. At the same time, the downward trend in the area of CO2 emissions also continued. Compared to 2010, emis sions declined by 14.1% in 2011. This reduction, which was achieved through voluntary measures on the part of companies, is far greater than that required by the CO2 act, which stipulates a 10% decrease in CO2 emissions compared to 1990. Swissmem member companies have actually reduced their CO2 emissions by 55.4% since 1990. Electricity is the most important source of energy for the MEM industries, but also the most expen sive. In a European comparison, Switzerland has high electricity prices. In the interests of preserving the competitiveness of Switzerland as a production location, it is extremely important for future energy policy to guarantee competitive prices, a very reliable security of supply, and a high proportion of domestic production.
Swissmem Panorama 2012 – Production and location factors
33
European industrial electricity prices 2011 CHF /kWh, medium voltage 2009
2010
2011
Slovakia
0.213
0.164
0.151
Ireland
0.180
0.156
0.148
Italy
0.217
0.217
0.144
Switzerland
0.151
0.147
0.143
Czech Republic
0.165
0.146
0.134
Spain
0.172
0.150
0.134
Latvia
0.135
0.125
0.129
Lithuania
0.129
0.138
0.128
Belgium
0.168
0.131
0.123
United Kingdom
0.161
0.133
0.120
Luxembourg
0.175
0.133
0.119
Greece
0.143
0.119
0.116
EU 27
0.159
0.128
0.116
Hungary
0.192
0.192
0.115
Poland
0.139
0.130
0.115
Germany
0.171
0.128
0.111
Portugal
0.143
0.123
0.111
Croatia
0.134
0.127
0.110
Slovenia
0.157
0.127
0.110
Norway
0.120
0.118
0.107
Sweden
0.102
0.114
0.106
Denmark
0.135
0.120
0.104
Netherlands
0.169
0.118
0.104
Romania
0.124
0.116
0.099
Turkey
0.118
0.120
0.094
France
0.106
0.092
0.089
Finland
0.104
0.092
0.085
0
0.02
Sources: Eurostat; SFSO; Enerprice-Partners AG
0.04
0.06
0.08
0.10
0.12
0.14
0.16
Did you know that…
Swissmem member companies have reduced their CO2 emissions by
55% since 1990.
Swissmem Panorama 2012 – Production and location factors
34
Strike statistics for Switzerland as a whole 1) Number of Max. number of workers companies involved affected 19 3 894
Approx. number of working days lost
Year 2000
Number of work disputes 8
2001
3
702
20 098
20 098
2002
4
535
21 947
21 447
2003
9
189
8 111
6 141
2004
8
1 117
24 399
38 915
2005
5
11
338
1 392
2006
3
4
635
7 870
2007
2
571
5 083
7 083
2008
8
59
10 160
13 844
2009
3
3
159
395
2010
2
2
107
2 287
Average for the whole of Switzerland 2000 to 2010
5
292
8 630
11 294
4 757
* S ource: seco; no more recent data available 1) Strikes that lasted at least one working day
Harmony in manufacturing sector as key success factor
The number of labour conflicts in Switzerland is far below the international average. A constructive social partnership is also one of the key success factors of companies in the MEM industries. The first ever “peace agreement” in the sector was signed between various employee associations and the Association of Swiss Engineering Employers (ASM) back in 1937. Accordingly, the MEM industries can look back on a 75-year tradition of social partnership in 2012. The current Collective Labour Agreement of the MEM industries is valid until 31 July 2013. This provides for progressive working conditions, and obviates the need for individual com panies to conclude separate framework agreements on an individual basis.
When viewed by number of companies, the MEM sector is made up primarily of micro-enterprises (businesses with less than 10 employees) and SMEs (10 to 20 employees). When the spot light falls on headcount, by contrast, the medium-sized and large companies account for the lion’s share.
Swissmem Panorama 2012 – Industry sector structure
35
4 | Industry sector structure
Company size structure Company size structure in the Swiss mechanical and electrical engineering industries in 2008
by number of companies
by number of employees
Small companies 22%
Large companies 35%
Medium-sized companies 8%
Micro-enterprises 9%
Large companies 2% Small companies 20% Micro-enterprises 68%
Medium-sized companies 36%
Source: SFSO Micro-enterprises: 0 to 9 FTEs, small companies: 10 to 49 FTEs, Medium-sized companies: 50 to 250 FTEs, large companies: 250 + FTEs FTEs = Full-time equivalents
Company size structure in the MEM industries Microenterprises 2001 Metal production and processing
Small companies 2008
2001
Medium-sized companies 2008
2001
Large companies 2008
2001
Total 2008
2008
150
136
75
74
46
42
19
18
270
6 095
5 491
1 425
1 442
261
291
23
25
7 249
1 339
1 318
507
537
262
283
67
74
2 212
544
531
193
203
85
64
32
35
833
1 398
1 355
670
641
287
306
69
68
2 370
automotive components
147
128
48
48
16
13
4
6
195
Other vehicle construction
161
162
24
28
12
10
4
7
207
9 834
9 121
2 942
2 973
969
1 009
218
233
13 336
Manufacture of metal products Manufacture of data-processing devi ces, electronic and optical products Manufacture of electrical equipment Mechanical engineering Manufacture of automobiles and
Total
Source: SFSO
Swissmem Panorama 2012 – Industry sector structure
36
Workforce structure by gender and area of activity in %
Breakdown by gender
2008
2009
2010
2011
Female
17.4
18.1
17.6
17.6
Male
82.6
81.9
82.4
82.4
Breakdown by area of activity
2008
2009
2010
2011
Administration/finance/services
14.2
14.9
15.1
15.4
5.4
5.5
5.6
6.1
Sales/marketing
3.3
3.6
4.1
3.9
Production/assembly/maintenance
Information technology
53.9
52.5
51.0
47.9
Research/development/planning
15.6
15.4
16.7
18.3
7.6
7.8
7.5
8.2
Technical sales force/training
Source: Swissmem
Did you know that ...
5%
of trainee positions in Swissmem companies could not be filled in 2011.
Commitment to the next generation
More than half of the people employed in the MEM industries work in production, assembly and maintenance. One area that has grown in size compared to previous years is research/ development/planning, which now accounts for 18.3% of employees. More than 60% of Swissmem member companies train up apprentices. Despite the difficult economic environment, the number of apprenticeship places rose last year from 9,372 to 9,530. A clear rise is evident in the professions of auto motive assembler, computer scientist, and production mechanic. In 2010, a total of 7% of trainee positions could not be filled, a figure which fell slightly to 5% last year. By pursuing the young talent initiative tecmania.ch as well as other activities, Swissmem is attempting to show young people and their
parents the exciting prospects that industrial professions offer, and to convey the appeal of the training itself. According to a survey conducted among Swissmem member companies, 58% of SMEs and 67% of larger companies currently have a shortage of specialist labour. This shortfall of highly skilled staff in the MEM industries is not just apparent in the area of international specialists, but at all levels. The continued fostering of dual training and further investment in education are therefore key issues for the MEM industries. Despite all this, the Swiss labour market cannot fully meet the demands of industry by itself. Ensuring freedom of movement at EU level is therefore of great importance.
Swissmem Panorama 2012 – Industry sector structure
37
Trainees by occupational category Sectors in %
Plant engineering 3% Mechanical engineering 31%
Other 18%
Automation 11%
Engineering design 11%
Business management 13%
Information technology 6%
Electronics 7%
Source: Swissmem
Trainees New trainees Occupation Plant engineering
Total
2009
2010
2011
2011
96
104
98
366
Automation
295
273
313
1 150
Business management
459
493
479
1 438
Electronics
196
163
217
706
Information technology
176
140
188
679
Engineering design
323
310
309
1 225
Mechanical engineering
889
824
828
3 204
Other
167
241
262
762
Total
2 697
2 548
2 694
9 530
Numbers at Swissmem companies
Swissmem Panorama 2012 – The MEM industries in an international context
38
5 | The MEM industries in an international context
Swiss industries' headcount abroad 1 400 000 1 200 000 1 000 000 800 000 600 000 400 000 200 000 0
2002
2003
Industry total
2004
2005
2006
2007
2008
2009
2010
of which MEM industries
Source: SNB
Total industry headcount by global region Region
2008
2009
2010
share in %
539 334
510 993
510 333
40.7
44 685
43 337
43 983
3.5
Europe
584 019
554 329
554 316
44.2
North America
214 613
201 393
202 698
16.2
Central and South America
135 794
133 917
139 369
11.1
Asia
EU Rest of Europe
274 558
277 621
295 520
23.6
Africa
39 543
39 870
41 424
3.3
Oceania
17 372
23 913
20 644
1.6
1 265 899
1 231 043
1 253 971
100.0
Total
Source: SNB
Swissmem Panorama 2012 – The MEM industries in an international context
39
Headcount of foreign industrial companies in Switzerland 180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 0
2003
2004
Industry total
2005
2006
2007
2008
2009
2010
of which MEM industries
Source: SNB
Increased headcount abroad
Whereas the headcount of Swiss industry abroad declined slightly in 2009 in the wake of the global economic crisis, the subsequent recovery resulted in a renewed rise of 4.1%. With a workforce of 491,745, the MEM industries accounted for 39.2% of all Swiss industrial personnel employed abroad. The strongest headcount increase in recent years occurred in Asia. The number of industrial employees in this region increased by 47% (or 94,839 staff) between 2005 and 2010. Whereas just 18.4% of Swiss personnel employed abroad worked in Asia in 2005, this figure had risen to 23.6% by 2011. The headcount of the Swiss MEM industries abroad increased over this period, but without simultaneously reducing the number of employees in Switzerland. In fact, the opposite oc
curred: The number of personnel in Switzerland rose by 5.5% between 2005 and 2010. The Swiss MEM industries employ more than 820,000 staff worldwide. Since direct foreign investment in Switzerland declined in 2010, headcount in the MEM industries accordingly declined slightly by 2.2%. There had previously been a significant expansion in the number of employees working in foreign in dustrial companies in Switzerland. Between 2004 and 2009, there was a 27.3% rise in headcount at foreign industrial companies in Switzerland. Viewed in overall terms over the last few years, there has been no evidence of a transfer of jobs from Switzerland to lower-wage production countries. Headcount has grown both abroad and in Switzerland over this period.
Swissmem Panorama 2012 – The MEM industries in an international context
40
Swiss industry's foreign capital holdings in CHF million 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0
2002
2003
Industry total
2004
2005
2006
2007
2008
2009
2010
of which MEM industries
Source: SNB
Capital holdings of total industry by global region Region EU Rest of Europe Europe
2008
2009
2010
share in %
128 280
128 238
124 783
41.3
34 244
31 439
28 396
9.4
162 524
159 677
153 179
50.7
North America
69 739
69 544
68 746
22.8
Central and South America
42 225
46 405
41 486
13.7
Asia
32 291
34 580
33 583
11.1
Africa
2 670
2 958
3 628
1.2
Oceania
2 790
1 192
1 546
0.5
312 238
314 357
302 169
100.0
Total
Source: SNB
Swissmem Panorama 2012 – The MEM industries in an international context
41
Capital holdings of foreign companies in Switzerland in CHF million 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0
2003
2004
Industry total
2005
2006
2007
2008
2009
2010
of which MEM industries
Source: SNB
Strong rise in direct investment in Asia
Whereas the foreign capital holdings of Swiss industry as a whole declined by 3.9% in 2010, those of the MEM industries rose by 3.5%. A combination of currency pressures and expansion in new markets drove this higher foreign investment. The MEM industries accounted for 30.1% of all industrial capital holdings abroad. In particular, the level of investment of Swiss industry abroad has increased sharply since 2004. The foreign capital holdings of Swiss industry as a whole amounted to CHF 142 billion in 2010, an increase of 88.9% on 2004. In Asia alone, capital holdings increased by as much as 135.8% over the same period, which clearly emphasizes the increasing importance of these markets for the MEM industries.
Direct foreign investment in Switzerland declined in 2010. Among other things, this is likely to have been driven by Switzerland’s diminishing appeal as a production location for currency-related reasons. Foreign capital investment in Swiss industrial companies has risen by 113% since 2004.
Swissmem Panorama 2012 – The MEM industries in an international context
42
The most important machinery-exporting countries in 2010 Country
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank 7
Rank 8
Rank 9
Rank 10
D
JAP
USA
CHINA
I
F
KOR
UK
NL
CH
Rank 5
Rank 6
Rank 7
Rank 8
Rank 9
Rank 10
Source: VDMA, Mechanical engineering excluding office and information technology
Ranking by selected product areas Rank 1
Rank 2
Rank 3
Rank 4
Paper processing machinery
D
I
CH
CHINA
USA
F
JAP
NL
UK
B
Packaging machinery
D
I
USA
CH
F
CHINA
S
JAP
NL
E
Machine tools
JAP
D
I
USA
CH
CHINA
KOR
A
F
E
Textile machinery
D
JAP
I
CHINA
CH
USA
F
TWN
KOR
B
Printing and paper technology
D
I
JAP
USA
CH
CHINA
FIN
F
UK
A
Scales
CHINA
D
JAP
UK
USA
CH
NL
MEX
I
DK
Food processing machinery
D
I
NL
USA
CHINA
CH
DK
F
UK
JAP
Turbines
USA
D
JAP
I
UK
CHINA
F
CH
S
MEX
Precision tools
D
JAP
CHINA
KOR
USA
I
USA
CH
A
S
Compressors/vacuum tech.
D
USA
I
JAP
CHINA
B
F
UK
CH
MEX
Plastics/rubber machinery
D
JAP
CHINA
I
USA
TWN
F
CAN
CH
KOR
Source: VDMA
Did you know that…
Switzerland is ranked
no. 1
in terms of machinery exports per capita.
Swissmem Panorama 2012 – The MEM industries in an international context
43
Machinery exports per capita in 1,000 euros
Switzerland Luxembourg Austria Denmark Belgium Germany Singapore Sweden Netherlands Italy Norway Slovenia Czech Republic Japan Rep. Corea Taiwan Hungary France 0
0,5
1,0
1,5
2,0
2,5
Source: VDMA
Switzerland – a leading machinery exporter
When viewed in absolute terms, Switzerland occupied 10 th place in a ranking of the world’s most important machineryexporting countries. If exports are viewed on a per capita basis, however, Switzerland takes first place. In many product areas, Swiss companies rank among the leading global providers. A combination of innovation and high product quality enables Swiss companies to compete successfully at a global level. As a further development, the importance of the service busi ness has increased continuously over the last few years. In particular, small and medium-sized companies tend to focus on a few niche markets while at the same time providing a strong level of service.
Stable political and economic parameters, a first-rate infra structure, the availability of specialist labour, and the high quality of tertiary education are all factors that explain why various multinational companies continue to base their group activities in Switzerland. Despite the difficult currency environment, a flexible labour market and an innovation-friendly environment represent further factors that should allow the companies in the MEM industries to continue to manufacture successfully in Switzerland and export their products to the world markets.
Swissmem Kirchenweg 4, P.O. Box 8032 Zurich Tel. +41 (0)44 384 41 11 Fax +41 (0)44 384 42 42 www.swissmem.ch info @ swissmem.ch from 15 October 2012 Pfingstweidstrasse 102 8037 Zurich Swissmem Vocational Training Brühlbergstrasse 4 8400 Winterthur Tel. +41 (0)52 260 55 00 Fax +41 (0)52 260 55 09 berufsbildung @ swissmem.ch www.swissmem-berufsbildung.ch Swissmem Executive Training School Brühlbergstrasse 4 8400 Winterthur Tel. +41 (0)52 260 54 54 Fax +41 (0)52 260 54 00 kaderschule @ swissmem.ch www.swissmem-kaderschule.ch