SME-MEM sector and the euro tide
Many Swiss SME-MEM businesses are getting by without a bank loan, according to a new survey by Swissmechanic. It underlines that over 70% of respondents would like to invest in Industry 4.0. However, the picture is split with regard to financing and the current euro exchange rate.
The MU-MEM sector cannot easily compensate for margin battles and investment gaps that have arisen - reads a statement from Swissmechanic.
A sigh of relief is sweeping through Switzerland: the franc has eased, Swiss exports are on the rise, the international economic upswing has arrived and the expectations of Swiss industry are good beyond all measure. "The Swiss economy is doing well again," is the general opinion. A small upswing is not yet an economic high. - The franc island continues to be threatened by the euro tide.
Swiss MEM at risk
For more than 27 percent of the companies surveyed, there is no longer any credit available for necessary investments, although more than 70 percent of respondents would like to invest in Industry 4.0, automation and digitalization. In the euro area, on the other hand, there is neither a shortage of capital nor a shortage of credit. The "investment hole" must be closed now, "otherwise the Swiss workplace will be threatened with a tapping out in the event of a new euro crisis," reads one point in the Swissmechanic press release.
However, this does not take a number of things into account: Firstly, it is not at all certain that the euro will continue to soar (risk of a new franc shock) and secondly, the economic consequences of the strength of the franc are far from over (convalescence of SMEs). Thirdly, the current upswing has been partly created artificially. According to data from the Commodity Futures Trading Commission, large investors in particular are betting on continued euro strength against the dollar.
The latest figures show that these speculative positions on a stronger euro have not been as high as they are now since at least the beginning of 2015.
A so-called credit drought
The Swissmechanic survey shows that over 70% of respondents would like to invest in Industry 4.0. However, the picture is split internationally with regard to financing. More than half of the established Swiss SME-MEMs manage without a bank loan. The proportion of companies with bank financing in Switzerland (35 %) is accordingly significantly lower than in neighbouring countries: Italy (52%), France (49%), Austria (48%), Germany (45 %). A successful credit application needs a longer-term upswing:
After all, it demands long-term good business reports, modern infrastructure, securities and future-oriented business models.
More than 27% of the companies therefore no longer receive loans and more than 26% do not wish to comment on this. The larger companies also participating in this survey have other ways of raising money or simply relocate parts of their production abroad.
Topic on Business Day
Swissmechanic has identified this investment gap as an important problem for Swiss SMEs and will discuss it with over twenty experts from politics, technology, research and business at the Business Day on 14 September. Among others there will be: Gerhard Pfister, Ruedi Noser, Prof. Dr. Peter Jaeschke, Otto Hofstetter and many more.
A long-term upswing is needed for SMEs to convalesce. Just six months of recovery, which is far from reaching all sectors and company sizes, is not enough. It would be illusionary and unrealistic to claim that the Swiss economy is doing well again.
Information on registration and the programme can be found at: www.swissmechanic-businessday.ch
