Why Switzerland continues to attract foreign companies despite the coronavirus pandemic
While this number is 9 percent lower than in the previous year, these companies have created 11 percent more new jobs — a total of 1,168 — than in 2019. Most of the new jobs were created by companies from China, the United States and Germany.
About 3,600 more positions are expected to be offered by these enterprises in the next three years, according to data from SRF, Switzerland’s public broadcaster.
In fact, Switzerland is one of the very few countries that have been able to attract international companies to its shores in 2020, a notoriously bad year for the global economy.
Experts believe this is due to the country’s strengths, including political, economic and financial conditions.
“Even in a time of crisis, Switzerland scored thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.
There are also other reasons that had prompted foreign companies to come to Switzerland in 2020, despite the economic uncertainty and travel restrictions.
“Protection of legal rights, freedom, and personal responsibility are stronger in Switzerland than in many other countries, even in times of pandemic”, said SGE’s co-president Walter Schönholzer.
Despite the pandemic, 220 foreign businesses set up their offices in Switzerland in 2020.
Switzerland’s attractiveness is also boosted by studies showing the country’s economy remains the strongest in the world.
Even though the health crisis plunged Switzerland’s economic activity into a “historic” 8.2-percent slump in the second quarter of 2020, the country still boasts the world’s most resilient economy, according to research by an insurance and reinsurance company Swiss Re.
The International Monetary Fund (IMF) expects a 3.5-percent rebound in Switzerland’s gross domestic product (GDP) in 2021.
It said Switzerland’s economy absorbed the shock of the pandemic better than other European countries and it “has navigated the Covid-19 pandemic well”.
IMF added that Switzerland’s “early, strong, and sustained public health and economic policy response has helped contain the contraction of activity relative to other European countries”.
Why Switzerland’s economy is on the up despite the coronavirus pandemic
The Swiss economic outlook is more positive than in previous months, despite the pandemic. Which sectors are rebounding the strongest?
The so-called ‘economic barometer’ of the Swiss Economic Institute (KOF) recovered sharply in February, gaining 6.2 points in one month.
The barometer stood at 102.7 points in February, rising above its long-term average of 100.
“The downward trend since the interim high during the pandemic in September 2020 has come to an end, at least for the time being. For the next few months, the barometer signals a somewhat more lively economic activity”, KOF said in a press release published on Friday.
The situation in the manufacturing and construction sector is “more positive than in the previous month”, KOF said.
It specified that in the manufacturing sector, in particular the paper, chemical and electrical industries are “more optimistic than before”.
“The wood, textile, food, and metal industries, on the other hand, are seeing a slight deterioration”.
Although the outlook for the economy is good, official figures show that the health crisis has impacted Switzerland’s job market, with the number of unemployed people rising across the country.
At the end of January 2021, 169,753 people were registered as unemployed with the regional employment offices — 6,208 more than the previous month, according to figures from the State Secretariat for Economic Affairs (SECO).
The unemployment rate increased from 3.5 percent in December 2020 to 3.7 percent currently. In all, 48,735 people more are jobless, compared to the same period in 2020 —that is a difference of 40.3 percent.
SECO data also shows that among the most impacted sectors are retail and commerce (23,039 unemployed) and hotels and restaurants (18,837).