Switzerland’s industrial sector is facing a domestic crisis while simultaneously experiencing a boom abroad – a complex situation with significant economic implications.
February 21, 2026, 7:56 PMFebruary 21, 2026, 7:56 PM
The Swiss industrial sector has been in crisis for four years, consistently experiencing declines in value added quarter after quarter, with an overall real decrease of approximately 10 percent. Job losses have been occurring for roughly the past year, with the Federal Statistical Office reporting a loss of 15,000 full-time positions. According to the KOF Institute at ETH Zurich, “the conditions are met to speak of an industrial recession.”
The Euro and the Swiss Franc nearing parity: a challenge for Swiss industry.Image: shutterstock.com
The industry is plagued by numerous problems, with the strong Swiss franc being a particularly prominent one. This represents an area where Switzerland has some degree of control. Daniel Lampart, Chief Economist of the Swiss Trade Union Federation (SGB), speaks for more than just union members when he says, “The overvalued franc is our biggest self-inflicted disadvantage.”
The dollar has already depreciated by more than 15 percent against the franc. For a long time, the relative stability of the euro offered some consolation. But, the European currency has also recently depreciated, by approximately 3 percent so far. The increased cost of doing business with Switzerland’s most important trading partner is adding further strain on the domestic industry.
Swatch Group CEO Nick Hayek recently issued a stark warning about these consequences. In an interview with CH Media, he stated this week: “Many Swiss SMEs are struggling with the extreme appreciation of the franc. Many have no choice but to move abroad, even though they don’t want to.”
Swiss Industry Has Created 200,000 Jobs Abroad
Data from the Swiss National Bank (SNB) shows that many industrial companies have already taken this step, establishing tens of thousands of jobs abroad, likely to mitigate the impact of the strong franc, which Hayek sarcastically refers to as the “superpower franc.” According to SNB figures, key industrial sectors created around 200,000 jobs abroad between 2008 and 2024.
Simultaneously, domestic employment has stagnated. Following the financial crisis of 2007 and 2008 and the Eurozone crisis of 2009, the franc appreciated dramatically against the euro. As an analysis by the Swiss Trade Union Federation shows, the large-scale industrial exodus began at that time.
The metalworking and mechanical engineering sectors, particularly affected by the franc’s appreciation, reduced their workforce by over 8 percent, resulting in the loss of more than 10,000 jobs by 2024. However, they simultaneously began a significant expansion abroad, creating around 140,000 jobs, a growth of 65 percent.
A similar, though smaller, exodus is also observable in the data processing equipment and precision technology sectors, including watchmaking. These sectors maintained roughly stable employment levels in Switzerland between 2008 and 2024, but added approximately 70,000 employees abroad, representing a 40 percent increase in staffing.
As early as 2015, industry representatives warned of a weakening of Switzerland’s economic position. Hans Hess, then President of Swissmem, commented on the consequences of the weak euro: “Currently, a third of industrial companies are operating at a loss. The risk is that they will therefore be less able to invest in innovation and new machinery.” He predicted the consequences would be delayed, stating, “There won’t be a big bang. But a gradual decline.” He expressed less concern for the companies themselves, but warned of the impact on Switzerland’s economic landscape.
Business Leaders Criticize Political Inaction
Hayek’s recent warnings likely stem from concerns that this trend will continue and reach a tipping point, critically weakening Switzerland’s industrial base with no turning back. He places significant responsibility on the new SNB Chairman, Martin Schlegel, for this perceived inaction. “I hear nothing from him. I notice nothing from him. The National Bank seems to have disappeared. Does it even exist?”
According to the «Bieler Zeitung», many SMEs share Hayek’s concerns. Nicolas Curty, CEO of the Affolter Group, warns that if the franc continues to appreciate, “we will reach the end of the line,” leading to a decline in profitability. Gilles Robert, CEO of Micro Precisions Systems MPS, says: “It’s getting a little harder with every deal.” Business leaders in the Biel region feel that the government is too passive, with Robert lamenting a tendency towards regulatory compliance and calling for a change in approach.
The Economics Ministry of Guy Parmelin acknowledges the criticism. A spokesperson for the minister, Urs Wiedmer, says Parmelin regularly exchanges information with various industries and associations to discuss current developments, challenges and framework conditions, also referencing the Round Table on Export, which will be held for the twelfth time in mid-May.
Pressure Mounts on the National Bank
The unions are also placing blame on the SNB. SGB Chief Economist Lampart says, “They are simply not visible.” He believes that the SNB should have taken action at the latest since not only the dollar, but also the euro, weakened against the franc, at least by publicly stating that further appreciation was undesirable.
However, under the new Chairman Martin Schlegel, the SNB is more passive than under the previous leadership. “The willingness to do something about the strong franc is even lower than under Thomas Jordan.” Lampart notes that even under Jordan, the SNB was too passive, with the consequences visible in the tens of thousands of jobs that key industrial sectors have eliminated domestically and created abroad. He believes that at least some of these jobs could have remained in Switzerland if the SNB had more actively countered the strong franc.
The National Bank declined to comment on the accusations. However, SNB Chairman Schlegel recently stated in the program «Eco Talk» that he has great respect for Swiss companies that have to compete in the international market every day, adding that they “have so far been able to cope well with major shocks.”
Hayek and other exporters suspect that the SNB’s passivity is due to the “joint statement” signed by the SNB in the US on September 29, 2025. This has led to the suspicion that the SNB will refrain from intervention in the foreign exchange market. However, the central bank disputes this, stating that the joint statement “does not restrict the monetary policy of the SNB in any way.” Rather, the US Treasury Department “acknowledges the SNB’s current monetary policy and recognizes that foreign exchange market interventions are an important instrument for the SNB to ensure appropriate monetary conditions and thus fulfill its statutory mandate of price stability.”
However, the “statement” is likely to be a topic of discussion in Bern. Luzern SP National Councillor David Roth has submitted a motion to obtain answers to several questions, including whether “the Federal Council has unilaterally restricted the freedom of action of the Swiss National Bank?” and “what specific intervention options” still exist today?
The answers are eagerly awaited by industry. The shift of jobs abroad is likely to continue until then. However, not everyone views this as negatively as Hayek and the unions. According to Kevin Gismondi, an economist at Zürcher Kantonalbank, it is too simplistic to view the creation of jobs abroad solely as a loss for the Swiss industrial location. Often, this involves a division of labor, with production taking place abroad and research being conducted in Switzerland. Gismondi says: “Ideally, this strengthens the Swiss location: jobs are created here – and not eliminated.” And not least, the industry is constantly changing: some of its sectors are becoming smaller, others larger. “it has roughly the same number of employees today as it did over 15 years ago.” (aargauerzeitung.ch)
