In terms of Foreign Trade, Switzerland ranks amongst the “most globalised nations in the world“. And the alpine nation still generates most of its wealth from exporting quality goods and services.
The recent Covid pandemic caused a serious slowdown in trade globally – however, 2021 figures just released by the Federal Department of Finance (FDF), indicate a return to pre-pandemic levels for Switzerland. So which sectors are the most productive and what does the foreign trade snapshot for 2021 look like compared to other areas?
2021 witnessed positive growth in Switzerland versus previous year, and the three main sectors strengthened their position to make up 92% of the total growth for last year. Some key highlights:
- Total exports reached CHF260 billion representing a growth of + 15% vs 2020 and + 7% vs 2019.
- Total imports recorded were CHF182 billion or +10% vs 2020 and -2% vs 2019.
- This equals a positive trade balance of CHF43 billion YOY.
- On the positive side, immunology products generated 75% of the total export growth.
- On the negative side, Jewellery and related items saw a negative trend of 53% vs previous year
- The main export markets for Switzerland in 2021:
- USA 18%
- Germany 17%
- China 6%
- The main import countries:
- Germany 27%
- Italy 9%
- China 9%
Before we look closer at Swiss Trade, it would be interesting to see how global trade performed in 2021.
In terms of exports: all continents record an increase in trade in 2021. The leading continent in terms of trade growth was Asia at +13.8%. Europe ranked second with +7.9% growth YOY. This was closely followed by the Middle East which recorded growth of +7.3%. And exports from South America ( +6.8%) , North America (+6.3%) and Africa (+5.1%) also grew.
Global imports also experienced a significantly stronger upswing in South America which led the way at 25.6%. But making the biggest contribution to overall growth were Asia (+11.1%) and Europe (+8.1%). Other areas such as North America (+12.6%) and the Commonwealth of Independent States (+10.7%) also recovered in 2021, exceeding the 2019 levels. In contrast, the Middle East (+5.3%) and Africa (+4.2%) remained below their pre-pandemic levels.
Swiss exports recorded record annual growth of 15% (or CHF 34.5 billion) in 2021 and this marked an all-time high of CHF 259.8 billion. The strongest period was Q1/21, with the best performing sectors being chemical and pharmaceutical products which together contributed to 42% of total growth. These rose by CHF 19 billion to CHF 201.3 billion within the space of one year, thus nearly reaching their record value in 2019. However, this development was strongly attributable to higher prices. On a quarterly and seasonally adjusted basis, growth fluctuated between 2% (Q1/21) and 5% (Q4/21).
% Change vs previous year
Fig 1: Export Development 2017-21.
Source: Bundesamt für Zoll und Grenzsicherheit BAZGTrade balance jumps from record to record
Key Takeaway Points
- Swiss exports recorded grew by 15% in 2021 to mark an all-time high of CHF 259.8 billion.
- In the same period, imports increased by CHF19 billion to CHF201,3 billion. But this increase was due mostly to increases in prices.
- The Trade Balance broke all records in 2021 and after increases in the previous two years of +19% and +16% respectively, the trade surplus recorded a dramatic 36% increase in 2021, reaching
CHF 58.5 billion which represents the third annual record in a row.
- Key Sectors:
- Chemical and Pharmaceutical products recorded an historic surplus of CHF75,9 billion
- The watch industry at CHF 19 billion and the precision instrument sector CHF8,9 billion also made large contributions to the positive balance.
- Not performing well on the other hand were the machine and electronic sectors which have continued to retract since 2011.
In Summary: While 2021 saw historic trade balance numbers, a closer look indicates that the growth is focused on a few sectors.
- While the chemical and Pharma sectors held their strong position and contributed to nearly 50% of the total exports, the position can be partly explained by the Covid pandemic.
- Although Machines and Electronics managed to grow compared to previous year, the results remained -2.7% under the 2019 level.
- With a result of -34% in the previous year and a growth of 37% last year, the volatile Jewellery and jewellery-related products sector is still under the levels recorded in 2019. Stronger results on the other hand came from the nourishment and luxury food sectors which recorded a growth of +9% and textiles, clothing and shoes which witnessed a growth of +4%.
According to the World Trade Organisation, Global trade volume is expected to grow by 3.0% in 2022 (down from 4.7% previously) and 3.4% in 2023, but these figures may be subject to revision due to uncertainty surrounding the conflict in Ukraine. Switzerland performed extremely well in certain sectors in 2021 as well as overall. However, some areas remain volatile with uncertainty still on the horizon as a result of armed conflict, rising interest rates and post Covid effects affecting the recovery. Switzerland has a diversified economy with a strong focus on in-demand industry segments such as Pharma and Chemicals. The WTO also stated that Switzerland has proven very resilient with regards to the recent pandemic, mainly thanks to a diversified economy and significant fiscal space to support households and firms. Time will tell if this is enough for continued growth and recovery.
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