Research - 16.09.2025 - 14:00
Growth in the Swiss economy remains sluggish, particularly in the manufacturing industry. Although the State Secretariat for Economic Affairs (SECO) recorded growth in value added for the manufacturing sector at the beginning of the year, this was followed by a decline in the second quarter. Industry associations such as Swissmem are warning of a continued downward trend, reporting planned job cuts and production relocations. Current US tariff policy and other geopolitical turmoil are proving challenging.
Nevertheless, Switzerland remains an industrial nation, according to Economiesuisse. “Manufacturing is the foundation of Swiss prosperity and impresses with its quality, performance and innovative strength – a strategic advantage for Switzerland,” emphasises Thomas Friedli, one of the authors of the newly published Swiss Manufacturing Survey 2025. The analysis of responses from 365 participants provides a comprehensive overview of the current situation and assesses future developments in Switzerland as a business location, showing how competitiveness can be further strengthened.
A key finding of the study is that many companies were able to stabilise again in 2024 following a decline in corporate profitability (EBIT margins) from 2022 to 2023. Margins strengthened slightly, particularly in the domestic market, while foreign business, especially for SMEs, remained under pressure. The proportion of companies with EBIT margins above 10 % increased by around a sixth compared to the previous year. “We are seeing a slight improvement in profitability, which shows that companies have better control of their cost structures,” says Thomas Friedli, Chair of Production Management at the University of St.Gallen.
According to the study, the continuing optimism in location planning is noteworthy: 35 % of companies increased their production capacities in Switzerland in 2024, while 25 % reduced theirs. Additionally, around 10 % of companies have established new locations in Switzerland over the past three years, surpassing any other region. Over the next three years, 38 % of companies expect to expand further, while 11 % plan to reduce their capacities. These findings contradict the impression of a large-scale dismantling of the Swiss industrial base, illustrating the breadth of strategies employed.
However, geopolitical uncertainty remains a significant risk for the Swiss industry. 89 % of companies surveyed feel the impact of global turmoil on production. US customs policy is a particular concern: 32 % of companies expect a decline in sales in the US, while 28 % anticipate supply chain disruptions. The sectors most severely affected are mechanical engineering and the manufacture of rubber and plastic goods. “Tariffs pose a double risk for many Swiss companies – they make exports more expensive and also jeopardise complex supply chains,” explains Thomas Friedli.
Despite these uncertainties, it continues to impress as a manufacturing location thanks to its quality, legal certainty and skilled workforce. SMEs in particular emphasise the importance of proximity to customers and the stability of framework conditions. At the same time, the “Made in Switzerland” label remains a significant competitive advantage, particularly for exports to Europe, which remains an important sales market accounting for 70 % of exports.
The St.Gallen study also shows that, while traditional technologies such as ERP systems and cloud solutions are well established, an increasing number of companies are turning to 5G and piloting generative AI. After all, the ability to innovate remains a decisive competitive advantage. However, the evaluation also shows that the proportion of sales generated by new products is falling slightly among SMEs, which is an indication of declining innovation momentum.
The results of the Swiss Manufacturing Survey 2025 reveal an apparent contradiction: while margins are showing a slight recovery and there is a continued willingness to invest in Switzerland as a business location, geopolitical risks, tariffs and high costs are casting a shadow over the prospects for long-term business success. According to the analysis, Swiss companies will have to invest selectively and focus more on resilience in the coming years, rebalancing their strategies between globalisation and localisation. As Thomas Friedli puts it: “Swiss industry is proving remarkably resilient. The future of Switzerland as a manufacturing location depends on its ability to bring innovations to market quickly while reducing its vulnerability to geopolitical shocks.”
The St.Gallen Production Management Conference offers you the opportunity to discuss the implications of the “Swiss Manufacturing Survey” with experts. Taking place on 21 and 22 October 2025 at the Hotel Einstein St.Gallen Congress Centre, the conference will focus on how companies can ensure their success despite shorter planning horizons, complex regulations, and increasing costs. The Swiss Manufacturing Award will also be presented during the conference. It will be awarded to one of the 350 participating companies that has made a significant contribution to Switzerland as a manufacturing location.
The full report is available to download here.
Image: Adobe Stock / tuned in
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