Credit Suisse : SMEs look to the new year with confidence – despite the ongoing pandemic

SMEs look to the new year with confidence - despite the ongoing pandemic

Credit Suisse and S-GE publish a study on the SME Export Outlook for the first half of 2021

21.01.2021

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Tiziana Hunziker
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Credit Suisse AG
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Sina Steininger
Head of Information
Switzerland Global Enterprise
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The sentiment of exportoriented Swiss SMEs has recovered sharply from last year's record low. Despite the ongoing pandemic, the majority of SMEs are anticipating a rise in exports in the first half of 2021. The outlook for the year as a whole is even more confident, as is clear from the latest survey on export sentiment conducted by Switzerland Global Enterprise (S-GE). The Credit Suisse Export Barometer has also improved strongly.

According to the latest S-GE survey conducted between mid-November and mid-December, export sentiment has bounced back to the level it was at prior to the outbreak of the pan-demic, and is also well above the growth threshold when viewed on a longterm basis. According to the survey results, looking forward to the first semester of 2021, 59% of SMEs anticipate rising exports, while 27% expect stagnation and 14% are bracing themselves for a further decline. For the year 2021 as a whole, perspectives are even more optimistic, as 72% of the surveyed SMEs expect a rise in exports. At the same time, the new year will continue to be dominated by the coronavirus crisis. For 71% of surveyed SMEs, the associated uncertainties remain the dominant theme. The majority of the survey participants are part of the manufacturing sector.

The Credit Suisse Export Barometer, which illustrates foreign demand for Swiss products, backs up this positive outlook. According to Credit Suisse, over the course of the last six months the prospects for Switzerland's export industry have brightened tangibly following last year's slump in confidence. Purchasing managers indices point to a significant improvement in sentiment in global manufacturing since the spring of 2020. This can be expected to support demand for Swiss exports over the coming semester.

Tiziana Hunziker, economist at Credit Suisse, commented: 'Unlike the services sector, global manufacturing has largely been spared the fallout from the second wave of Covid-19. Export sentiment in the industrial sector is accordingly positive. The Export Barometer is therefore indicating an increase in exports over the next semester.'

Alberto Silini, Head of Consulting at Switzerland Global Enterprise, added: 'At the end of 2020, exportoriented Swiss SMEs have returned to optimism. They have quite clearly learned from the experiences of the first wave and successfully adapted their business models in response. This once again testifies to the impressive ability of Swiss SMEs to adapt to changed circumstances. It remains to be seen whether their expectations will be met in light of further developments of the pandemic.'

Further information on the SME export outlook for the first half of 2021 can be found in the brochure.

The SME export outlook for the second half of 2021 will be published on July 1, 2021.

1. Credit Suisse Export Barometer methodology
   The Credit Suisse Export Barometer takes as its basis the dependence of Swiss exports on foreign export markets. In constructing the export barometer, we have drawn together important leading industry indicators in Switzerland's 28 most important export countries. These indicators generally have a forecast horizon of approximately one to two quarters. The values of these leading indicators are weighted on the basis of the share of exports that goes to each country. The export barometer consolidates this information to produce a single indicator. Since the values in question are standardized, the export barometer is calibrated in standard deviations. The zero line corresponds to the growth threshold. The long-term average growth of Swiss exports of approximately 5% is 1. For more detailed information: Credit Suisse (2009), External Trade Switzerland - Facts and Trends, Swiss Issues: Industries, available at: www.credit-suisse.com/research.

   
   Switzerland Global Enterprise SME Export Sentiment Indicator methodology
   The SME export sentiment indicator is based on a semiannual survey of a fixed panel of around 200 Swiss SMEs. Participants represent the pharmaceuticals/chemicals industry, machinery, consumer goods, the metals industry, paper, electrical engineering, the precision instruments industry, services, ICT and food. SMEs indicate whether they expect growth, stagnation or a decline in exports in the current semester compared with the previous one. To emphasize the forecast nature of the SME export sentiment indicator, expected export activity in the following semester is weighted at 60% with exports in the current semester being weighted at 40%. The SME export sentiment indicator can range from 0 to 100, whereby figures between 0 and 50 show an expected decline in exports and figures of 50 to 100 an expected rise in exports. Participants provide further information on export volumes, for instance the reasons behind a change in their export volume, export markets, etc. This information gives an accurate picture of the export activities of Swiss SMEs.

Credit Suisse
Credit Suisse is one of the world's leading financial services providers. Our strategy builds on Credit Suisse's core strengths: its position as a leading wealth manager, its specialist investment banking capabilities and its strong presence in our home market of Switzerland. We seek to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. Credit Suisse employs approximately 48,800 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.

Switzerland Global Enterprise
Switzerland Global Enterprise (S-GE) is the official Swiss organization for export and investment promotion with around 200 employees at offices throughout Switzerland and in 31 countries. S-GE supports Swiss SMEs in their international business and helps innovative foreign companies to establish in Switzerland. In doing so, S-GE relies on a unique network of national and global partners. This is how S-GE creates added value for its clients and prosperity for Switzerland. As a non-profit organiza-tion, S-GE provides a public service for its clients on behalf of the Swiss Confederation (State Secretariat for Economic Affairs SECO) and the cantons. www.s-ge.com.

Disclaimer
This document was produced by Credit Suisse and Switzerland Global Enterprise. The opinions expressed herein are those of Credit Suisse and Switzerland Global Enterprise as of the date of writing and are subject to change at any time. This document has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer, a recommendation, or an invitation from or on behalf of Credit Suisse to purchase or sell investment instruments or to execute transactions of any kind. References to past performance should not be construed as an indicator of future performance. Although the information and analysis contained in this document have been compiled or arrived at from sources believed to be reliable, Credit Suisse and Switzerland Global Enterprise do not guarantee their accuracy or completeness and do not accept liability for any loss arising from the use hereof.

The publication may be quoted provided that it is cited as the source.

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