Swiss MEM Industry Proves Resilience Amid Ongoing Crises

The Swiss Mechanical, Electrical, and Metalworking (MEM) industry has been a cornerstone of Switzerland's economy for over a century. Despite facing numerous crises, including the Great Depression, two world wars, oil shocks, the financial crisis, and the COVID-19 pandemic, the MEM sector has consistently demonstrated its resilience.

A study by Swissmechanic and Bak Economics analyzed 100 years of industrial history in Switzerland and found that the MEM industry increased its real value added more than sevenfold since 1925. The sector now contributes around 7% to Switzerland's GDP, employs about 7% of the country's workforce, and accounts for a significant portion of goods exports, with an export share of over 24%.

The study revealed a pattern of recurring shocks followed by recoveries. For example, after World War I, the MEM sector grew rapidly but was then hit hard by the Great Depression. The industry rebounded significantly in the post-war period, driven by European demand and the American Marshall Plan. However, the first oil shock in 1973 brought growth to an abrupt end, followed by a recession in 1975.

In recent years, the MEM sector has faced increasing challenges, including margin pressure due to the Swiss franc shock of 2015, the global financial crisis of 2009, and the COVID-19 pandemic. The study highlighted the importance of short-time work programs in retaining skilled workers during times of crisis, which allowed for rapid recoveries.

However, smaller companies in the MEM sector have faced significant pressure to adapt and compete, with a decline in micro-enterprises and small enterprises between 2013 and 2023. The study emphasized the need for reliable framework conditions, including guaranteed market access, competitive energy policies, minimal regulatory burdens, and planning certainty for companies.