Container loading in Basel’s Rhine port: Switzerland, an export country, remains under pressureBild: KEYSTONE
The tariff conflict with the USA appears to have been resolved, but the Swiss economy is expected to grow only slightly in 2026. There are also warning signs from the labor market, which has been robust for a long time.
03.12.2025, 18:2503.12.2025, 18:25
The Swiss economy has been remarkably resilient in recent decades. Financial crisis, franc shock, Corona – nothing seemed to put them in distress. But now the warning signals are piling up. “Uncertainty is the new normal in the global economy,” it was said at an Economiesuisse media conference on Wednesday.
The business association presented its economic outlook for 2026, based on a survey among member companies. Accordingly, gross domestic product (GDP) is expected to grow by only 1.0 percent, compared to 1.2 percent this year. Exports are looking problematic. Several industries expect falling foreign sales.
Economy Minister Guy Parmelin announced the agreement in the tariff dispute, but the reduction has not yet been implemented.Bild: keystone
“The wind on the international markets remains rough,” said Economiesuisse chief economist Rudolf Minsch. Exports got off to a “bright start” in 2025, but that was mainly due to the USA, where many companies filled their warehouses preventively before President Donald Trump implemented his threatened tariffs. After that there was a significant drop.
Problems not only with the USA
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Switzerland was hit particularly hard at 39 percent. Two thirds of the companies surveyed by Economiesuisse said they were severely or very severely affected by US tariffs. An agreement has now been reached, but the reduction to 15 percent has not yet been implemented. And it is still just a declaration of intent.
Things don’t look much better elsewhere. China practically only lives from exports. Domestic demand remains weak, also because of the persistent real estate crisis. In Europe, some countries are developing dynamically, but growth remains low in Switzerland’s important neighboring countries Germany, France and Italy.
Robust consumption
Like few countries, Switzerland has benefited from globalization, based on the World Trade Organization (WTO). Now she is struggling with the backlash. The industry is particularly suffering, as sales have been declining for months. “And that won’t change so quickly,” was the unpleasant message from Rudolf Minsch.
Things are looking better for the domestic economy. Economiesuisse expects that housing construction, which has recently stagnated, will pick up. Private consumption is likely to remain robust, also because real wages are expected to rise again, as they did in 2025, although this assessment is controversial. Because Switzerland benefits in advance from the comparatively low inflation.
Regardless of the cautiously positive assessments (Raiffeisen also expects GDP growth of 1.0 percent for 2026), there are indicators that the “golden years” could be over. Because in some areas the skid marks are obvious.
Labor market
The Swiss economy has been a job machine in recent years. Economiesuisse expects that many new jobs will also be created in 2026 and that unemployment will only rise slightly from 2.8 to 3.0 percent. But 18 percent of the companies surveyed said they had too many staff, and the climate on the labor market is also becoming harsher.
There are increasing reports that university graduates are having difficulty finding a job. IT specialists, whose jobs were long considered secure, are also feeling pressure. The reason is artificial intelligence (AI), which is leaving “a clear mark on the Swiss labor market,” according to a study by the KOF Institute at ETH Zurich.
Tech companies like Google created many jobs in Switzerland.Bild: EPA/KEYSTONE
The losers from the introduction of generative AI models include programmers and system developers, but also other office jobs. The number of job seekers is increasing in these areas. However, “manual” sectors such as cleaning staff, caretakers or seamstresses are hardly affected. It is not an entirely new finding.
Swiss franc strength
The strong franc has long been celebrated as a permanent fitness cure for Swiss companies. This is also the case in the book Antifragile Switzerland, which the Avenir Suisse think tank donated to celebrate its 25th anniversary. Recently, the currency has continued to appreciate against the dollar and euro and, according to Economiesuisse, this is likely to continue to a limited extent.
A hard franc is positive for Swiss consumers, but the National Bank has to buy foreign currency to prevent even greater appreciation. And in a survey by the Swissmem association, the beleaguered industrial companies described the strength of the franc as the main problem. You can also overdo it with fitness training.
Pharma
Switzerland’s export success is based primarily on one industry: the pharmaceutical industry. The city and region of Basel owe their prosperity to it, but now, according to the NZZ, the end of the land of milk and honey is looming. Donald Trump is putting strong pressure on pharmaceutical companies to lower their prices and relocate production to the USA.
In return, the two “big players” Novartis and Roche are putting on a power play to force higher drug prices in this country. According to the NZZ, Roche CEO Thomas Schinecker recently made it clear at an event: “As a global company, we are geographically flexible. It’s not Switzerland.” It was a pretty clear indication.
Switzerland does not yet have to fear relegation, but ongoing geopolitical tensions could easily lead to deviations from the base scenario, according to Economiesuisse. Rudolf Minsch warned that the “sporty valuation” on the stock exchanges is a factor of uncertainty. In the event of a correction, the consumer climate in the USA could suffer.
An erratic US president, China as a rival instead of a pure sales market, plus the challenge of AI. These are not easy times for a small, export-oriented country like Switzerland. Perhaps the cautiously positive economic forecasts are just the calm before the storm.
