Search

Economic Situation Swiss Foundry Industry Affected by the Cyclical Slowdown

| Editor: Nicole Kareta

With a volume of 42,160 tons delivered last year, the 45 companies belonging to the Swiss Foundry Association (GVS) produced a total of around nine percent less than in the previous year. For the current year, the industry association expects stabilisation at this lower level.

Related Companies

The trade dispute between the USA and China as well as the unresolved brexit caused the significant cooling off.
The trade dispute between the USA and China as well as the unresolved brexit caused the significant cooling off.
(Source: gemeinfrei / Pixabay)

Thanks to outstanding innovative developments and the typically Swiss values of quality, reliability, flexibility and on-time delivery, the Swiss foundry industry was able to consolidate its good position in international competition in 2019 as well. Growth rates were primarily achieved through new orders from the entire transport sector, especially from the automotive and commercial vehicle industry. Increasingly complex lightweight castings for reducing CO2 emissions are among the specialities of the Swiss foundry industry. Increasingly, orders were also received in the field of e-mobility and from the entire environmental and energy sector for new sustainable developments, for example for drinking water supply and treatment. Good production capacity utilisation was also ensured by the continuing boom in the construction industry in Switzerland and abroad.

Lower Production Volume

In the first half of 2019, the order situation in the Swiss foundry industry remained on a stable upward trend - with continuously moderate growth rates compared to 2018 in almost all user markets. In the second half of the year, however, the growth momentum slowed down considerably; in some GVS member companies, the order intake and production capacity utilisation declined by around 10 to 20 % towards the end of last year. Overall, the production volume of the 45 Swiss foundry companies that are members of the industry association fell by around 9 % to 42,160 tonsbre delivered in 2019 compared with the previous year.

Brexit and Trade Conflict as Cause

The lower order intake reflects the economic downturn in the important export markets of the Swiss foundry industry, which account for around 80 % of the total business volume. The trade dispute between the USA and China as well as the unresolved brexit caused the significant cooling off. In this uncertain economic policy environment, large corporations in particular made fewer and fewer major investments in 2019. Customers in the automotive industry once again massively increased the pressure to reduce prices in order to finance upcoming investments in new technologies such as electric mobility and autonomous and networked driving. Lightweight design measures have become standard and commodity. In addition to the global economic slump, the loss of margins due to the successive renewed appreciation of the Swiss franc against the euro also had a negative impact on the annual result.

No Turnaround in Sight

There are still few indications of a turnaround in the near future. Accordingly, the Swiss foundry industry expects business to stabilise at this lower level in 2020. There is only a chance of stabilisation if there are no further economic blockades, such as new trade conflicts or further escalation in the Middle East.

Irrespective of what is happening on the world political stage, Swiss foundries remain innovative and willing to invest and are ideally positioned to contribute to solving social problems in almost all areas of life with the research, development and production of high-tech castings, in line with the aspects of sustainability, energy efficiency and environmental protection.

The Swiss Confederation will continue to meet the constantly changing framework conditions with its high degree of adaptability. The implementation of digital technologies in manufacturing as well as within the value-added chains with customers, suppliers and partners plays a central role here - in addition to the training and promotion of skilled workers.

This article is protected by copyright. You want to use it for your own purpose? Contact us at support.vogel.de (ID: 46384490)