The Swiss machinery, electrical and metals industry reported a 14.4% year-on-year increase in orders during the second quarter of 2024, marking the fourth consecutive quarter of growth, according to industry group Swissmem. The sector's total orders rose 12.1% in the first half of the year, the strongest six-month performance since 2021.
Swissmem Director Stefan Brupbacher noted that the recovery in the Swiss tech industry has continued, though he emphasized the fragility of the rebound. Revenue growth slowed to 1.7% in April-June, down from stronger gains earlier in the year. The expansion was driven primarily by large enterprises, which saw a 2.9% increase in sales, while small and medium-sized companies (SMEs) experienced a 3.8% decline.
Operational capacity remains a concern, with the sector's utilization rate at 81.1%, below the long-term average of 85.6%. The underutilization has intensified pressure on profit margins, with EBIT margins deteriorating across much of the industry. A quarter of companies now report negative margins, and nearly 30% are barely covering capital and R&D costs, leaving little room for future investment.
Industry risks remain elevated, with Swissmem warning that renewed conflict in the Middle East, rising energy costs and supply chain disruptions could derail the tentative recovery. Despite these challenges, cautious optimism persists: 34% of member firms expect foreign orders to rise over the next 12 months, while 41% anticipate stable demand.
