Switzerland is among the most developed nations and is a free market economy. The country was the 15th largest exporter across the globe, accounted for nearly $302 billion in 2018 and was the 13th largest importer globally with nearly $272 billion in 2018. The EU is Switzerland's key partner for trading. Nearly 43% of the country’s exports are destined for EU countries and 78% of the country’s imports reported from the EU. In 2019, nearly 83% of the country’s exports of manufactured goods to the EU were reported as compared to the primary goods which represented 11% of EU exports of goods. The primarily exported manufactured goods include chemicals and machinery.

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The operations of some crucial companies getting affected by COVID-19 outbreak include Nestlé S.A., F. Hoffmann-La Roche AG, Novartis International AG, Lonza Group Ltd., and Stimit AG.

However, the country’s will likely decline in 2020 owing to the global crisis of coronavirus, which has increased concerns regarding low industrial output, supply chain disruptions, and decline in profitability. The machinery and equipment manufacturers are suffering from low demand due to shutdown of several industrial operations, including automobile and construction. For instance, OC Schindler Management AG, a manufacturer of escalators, elevators, and moving walkways anticipates a decline in their revenue in the first quarter of 2020. Due to COVID-19 epidemic, Schindler sees its revenue growth for full-year 2020 in local currencies is anticipated to be contained between 0% to -10%. Earlier, the company estimated the revenue for the full year 2020 between 0%-5% in local currencies at risk.

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Depreciation of key foreign currencies against the Swiss franc resulting in the effects of negative currency translation, which is now anticipate being higher as compared to estimated earlier. In 2020, the restructuring costs are expected to reach up to nearly $103 million, enabled by the factory closure in Spain and speed up of efficiency programs in selected countries. By considering the impact of COVID-19, higher restructuring costs and foreign currency headwinds, the company’s net profit in 2020 is expected to be lower than 2019, in the order of magnitude of 20%. Apart from this, the machinery and equipment manufacturers are also facing concerns regarding low demand for their products across industries owing to the lockdown effect in several countries.

Switzerland government and banks are taking initiatives to reinforce the economy. For instance, on 13th March 2020, the government declared several measures which amounted to nearly $10.3 billion. These measures include compensation to decreased export promotional operations of nearly $4.6 million and nearly $10.3 million as a guarantee to the organizations for covering their additional costs. Other measures include emergency support to compensate salaries of temporary laying off and further effective measures for companies primarily affected worth $1 billion. Additionally, banks are working to lend funds to small business affected by coronavirus pandemic. For instance, Credit Suisse has reported proposing a plan of a $20 billion lending fund, along with UBS Bank. This fund intends to ensure short-term liquidity for SMEs in Switzerland whose operations hit by the COVID-19 outbreak. This, in turn, will help to revive the economy from the crisis.

Verticals Affected Most

• Automobile
• Energy
• Machinery
• Healthcare
• Metal
• Others (Retail and IT and Telecom)

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