Woes of Global Economy Hit Bottom Line of Switzerland’s Industry
The global economic downturn is increasingly leaving its mark on Swiss industry, raising the prospect of a further deterioration of momentum in the export-oriented nation.
Swiss industrial giant ABB Ltd. felt the effect of a drop in factory investment in the third quarter as robotics and automation orders slumped. Steelmaker Schmolz + Bickenbach AG announced it would respond to a “massive de-stocking” in the automobile sector by raising as much as 350 million francs ($354 million) of capital.
“When you switch on the television in the evening, we have only problems,” said Clemens Iller, chief executive officer of the steelmaker, which derives more than half its sales from the automotive sector. On a conference call with reporters on Wednesday he described the downturn as “violent” in its scale.
The Swiss economy has already lost steam as a result of a strong currency, fallout from the trade war and weakness in Germany -- the biggest export destination -- where car manufacturers are under pressure to transition away from combustion engines.
Economic growth is forecast to be the slowest in a decade this year, leading indicators suggest there’s no sign of a reversal and the government’s chief economist, Eric Scheidegger, said a technical recession cannot be ruled out.
“Macroeconomic indicators are mixed in Europe and China, while they weaken in the U.S.,” ABB said. “Global markets overall remain affected by geopolitical uncertainties.”
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