As global economic uncertainty deepens, Swiss exporters are entering a more fragile phase. Coface has just released its quarterly update on country and sector risk assessments (June 2025), and the signals are clear: economic risks are rising for Swiss SMEs operating internationally. The downgrade of 23 sectors and 4 countries marks a significant turning point.
In today’s volatile environment—marked by geopolitical shocks, shifting trade policies, and weakening global demand—understanding these changes is no longer optional for business leaders. It’s essential.
Uncertain waters: Switzerland’s economic risks explained
Decisions by U.S. President Donald Trump on tariffs, combined with intensifying tensions in the Middle East, are disrupting global trade flows. Even temporary suspensions haven’t erased the damage: trade is slowing and risk levels are rising. Swiss exporting SMEs—especially in metallurgy and automotive components—must adapt to a new normal: global instability.
Key insights at a glance:
- The global economy is losing altitude—and turbulence lies ahead for Switzerland’s export-driven industries.
- Corporate failures are rising worldwide—from Asia to North America—and Switzerland’s supply-dependent economy is sending warning signals.
- Short-term boosts in China and India hide deeper vulnerabilities, as cooling demand and fading subsidies threaten long-term growth.
- In Switzerland, two key sectors — Metallurgy and Automotive— have been upgraded from “high risk” to “very high risk” highlighting increasing challenges and uncertainties.
Economic risks ahead: low growth, high threats
The global economy is slowing down. Global GDP growth forecasts have been revised downward: 2.2% in 2025 and just 2.3% in 2026. But if geopolitical tensions escalate, growth could fall below 2%. Inflation remains volatile, with a 4% peak expected in the U.S. by late 2025, especially if energy prices keep rising.
Central banks are responding cautiously. The Fed might begin cutting rates this fall—but only if inflation stays contained. Meanwhile, the European Central Bank is easing gradually but may soon hit its floor rate.
For Switzerland, this global fragility translates into mounting exposure. As an open, export-oriented economy, it is directly affected by trade frictions and currency volatility. A strong franc supports domestic purchasing power, but squeezes exporters’ margins.
Growth in business failures: a red flag for Swiss supply chains
By mid-2025, business failures continue to rise sharply. Nearly 80% of advanced economies saw an increase in insolvencies in Q1 2025 versus last year—often exceeding pre-COVID levels.
- In Asia-Pacific, construction and real estate are particularly vulnerable (Japan, Australia).
- In Europe, despite some signs of stabilization, insolvencies remain 25% higher than pre-COVID levels, adding stress to Swiss supply chains.
- In North America, Canada is stabilizing, but the U.S. recorded a 4% rise in Q1 insolvencies. Company margins are being squeezed by rising interest rates, increased costs from tariffs, and weak pricing power.
China and India: growth masks deeper vulnerabilities
In China, a temporary export surge—helped by tariff suspensions—boosted growth in early 2025. But this is short-lived. Forecasted GDP growth is 4.5%, with risks increasing as subsidies decline and the real estate crisis continues. The tariff suspension ends in August—potentially triggering a new downturn.
India’s strong Q1 performance (+7%) was driven by public spending. Yet this momentum is fragile: urban consumption is slowing, and private investment remains weak. In the medium term, only domestic consumption will support growth — a risky dependency in an uncertain global environment.
Swiss economy: sectors under maximum pressure
Metallurgy: from resilient to vulnerable
Globally, the steel industry faces a structural crisis: 600 million tons of overcapacity (~25% of global output) is depressing prices and margins. The situation is worsened by weak macroeconomic conditions, energy tensions, and new tariffs in Canada, Mexico, and Europe.
In Switzerland, Coface has downgraded the metallurgy sector to “very high risk.” The U.S. announcement of 50% tariffs on steel and aluminum has halted export growth. A modest U.S. uptick can’t compensate for collapsing demand from Germany—Switzerland’s top buyer.
- Capacity utilization is well below average
- Short-time work schemes are being activated
- Confidence is at its lowest since the pandemic
- Even the more stable metal processing segment is under strain
Only machinery construction shows relative resilience—but even here, production is falling.
Automotive: export dependency and rising risks
Switzerland doesn’t manufacture cars, but it is deeply integrated into the global automotive supply chain, with many specialized component suppliers.
These companies are highly exposed to foreign markets—especially Germany and the U.S., both of which now impose 25% tariffs on auto parts. The sector has therefore been downgraded to “very high risk.”
After a quiet winter, the industry took a downturn in spring 2025. Since January, the KOF indicator remains deeply negative, highlighting:
- Sharp production declines
- Falling orders
- Rising insolvencies and job insecurity
In fact, automotive business failures surged by 34% in 2024, more than double the national average. In Q1 2025, they rose another 13%, while most other sectors stabilized.
Will Switzerland be spared from global economic turbulence?
The conclusion is clear: Switzerland is no longer immune to global economic shocks. Key export sectors are under pressure. Coface’s downgrades to “very high risk” reflect rising insolvencies, margin pressure, and volatile trade policies.
Swiss SMEs, especially exporters, must proactively strengthen risk management—both internationally and locally.
What Swiss businesses should do now
Success in the coming years will depend on:
- Early detection of financial stress among partners
- Diversification of supply chains and clients
- Real-time risk monitoring of countries and sectors
Want to better assess how global risks may affect your business?
Contact our experts in Switzerland or access our latest Risk Review.
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