Industry faces rising energy costs
(23.03.2022) Swiss industrial SMEs were not euphoric about the end of the pandemic. Raiffeisen Bank's PMI-SME index rose from 47.4 to 56.7 points between January and February 2022. However, this leap should not obscure the challenges facing the secondary sector.
After the concerns raised by the Omicron variant, SMEs in the Swiss industry have been quick to recover. Confidence in the sector is high, particularly as new work orders are being filled (up from 46.3 to 57.7) and production volume has increased (from 42.3 to 53.9). Even employment has seen a positive trend (from 46.2 to 50.8).
Nevertheless, despite a large number of promising indicators, the situation remains tense for many SMEs. Supply problems persist, particularly for electronic components. Delivery times have increased in recent weeks, which has had a direct effect on storage costs. Many companies keep inventories that tie up their capital and put a strain on cash flow. As a result, purchase prices also tend to increase.
Rising energy costs also have a negative effect on small and medium-sized businesses in the industry. The price of gas increased by 25% in January 2022 compared to December 2021. Energy-intensive industries are the most penalized. SMEs, therefore, remain watchful of the evolution of the conflict in Ukraine. The strong franc is also dragging down business sentiment.