Regarding the Corona pandemic, we are slowly returning to normality. At the end of this month, Switzerland plans to lift the special situation. However, as the end of the state of emergency due to Corona draws ever closer, the conflict in Ukraine has erupted. This further complicates the situation that the industry has been struggling with for quite some time now: the rising prices of raw materials and energy.
The Swiss industry is recovering from the pandemic. Production in the secondary sector increased by 6.2 % in the fourth quarter of 2021 compared to the same period a year earlier, as reported by the Federal Statistical Office. And the forecasts for this year also look basically good. In December 2021, the State Secretariat for Economic Affairs SECO forecast growth of 3.0 % for 2022. However, not everything looks bright for the Swiss industry at the end of the pandemic. Rising raw material and energy prices are delaying the recovery from the pandemic for Swiss manufacturing companies.
Raw material shortage and rising prices
The Corona pandemic led to the reduction of production and even the complete shutdown of production plants in many places; this was also the case in the raw materials sector. As a result, there were shortages of raw materials, especially when the economy picked up again. In addition, the situation worsened due to a lack of freight capacities. The supply bottleneck in turn drove up prices. A survey by Swissmem at the end of last year showed that 72 % of the companies questioned had to pay more for metals and metal products. In addition, freight costs for companies increased by 50 %.
Early action
We recognised the worsening situation at an early stage and reacted to it immediately. Thanks to good supplier relationships and full warehouses, our customers can still rely on us to deliver on time.
Electricity price at record high
In addition to the high prices of raw materials, Swiss industrial companies face another challenge: the record-high price of electricity. Energy-intensive companies usually buy their electricity on the free market. There, the price of electricity has quadrupled within a year. Some companies are therefore forced to pass on the rising energy costs to their customers.
Becoming more independent
In order to be less affected by rising electricity prices in the future, we will rely on solar power produced on site. With solar modules on our production building, we will be able to cover part of our energy consumption ourselves. The photovoltaic system is currently in the planning stage. By switching to renewable energies, we are also making a further contribution to sustainability.
Together with our suppliers and customers, we will also be able to master the raw material and energy challenges. We look forward to continuing to grow together.