Our comprehensive assessment of Switzerland's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Switzerland, as well as the latest industry developments that could impact Switzerland's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Switzerland before your competitors.
Switzerland Country Risk
Steady Growth Ahead
Switzerland's growth trajectory over the medium term will be increasingly powered by consumer spending.
The government's robust fiscal position implies it will be able to step in and boost growth in the event that any external shock puts a sharp break on Swiss growth.
Although the Swiss National Bank's removed its CHF1.20/EUR floor on January 15, it will continue to intervene in FX markets in order to prevent excessive franc appreciation. Beyond the next several quarters, the franc will begin to gradually depreciate from overvalued levels.
A narrowing of Switzerland's large current account surplus will gather steam in 2016, but the surplus will remain sizeable over the coming years....
Switzerland Industry Coverage (7)
Switzerland Commercial Banking
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BMI View: The short-term outlook for Switzerland's construction industry is subdued, with growth expected to remain flat in 2015 and 2016. While we forecast a return to more positive territory from 2017 onwards, the maturity of the market and limited public spending means annual growth rates will remain in low single digits over our ten-year forecast period. Much of this growth is based on investments in the transport sector, particularly rail, which is set to benefit from an influx of EU funding as the region develops transport routes such as the Rhine-Alpine Corridor. Meanwhile, there is little active investment in the...
BMI View: We have a positive though sluggish outlook for both Switzerland's major life and non-life insurance segments. Although the country is signified by the strength and maturity of its markets, this implies also that premium growth is limited in the foreseeable future. The overall insurance sector will be driven primarily by non-life insurance, where total premiums are boosted by health insurance in particular - on the back of rising per-capita private healthcare spending.
Switzerland Medical Devices
BMI Industry View: We expect the Swiss medical device market to exhibit below average growth for the Western European region over the 2014-2019 period, with other medical devices and consumables registering the highest growth during this period. Further depreciation of the Swiss franc against the US dollar will be the main factor restricting growth in US dollar terms during the early part of the forecast period. Over the last 15...
Pharmaceuticals & Healthcare
Switzerland Pharmaceuticals & Healthcare
BMI View: Roche's restructuring efforts within its manufacturing network are indicative of deep pipeline shifts. Tailored manufacturing capability will support the company's established biosimilar defence strategy as it prepares itself for erosion of key product revenues to begin in 2018. As part of an industry-wide trend, we expect to see further traditional small-molecule plants being decommissioned and investment being put into increasing in-house biologics capabilities.
Headline Expenditure Projections
Pharmaceuticals: CHF7.06bn (USD7.71bn) in 2014 to CHF7.07bn (USD7.27bn) in 2015; +0.10% in local currency terms and -5.8% in US dollar terms. Forecast stayed flat compared to last quarter.
BMI View: Switzerland has an extensive national power grid, focused primarily upon hydropower and nuclear power generation. The country has committed to phasing out nuclear power, which currently accounts for around 16% of installed capacity and over 38% of generation, by 2034 which could jeopardise domestic energy security leaving Switzerland more reliant upon regional energy imports. As such, we expect to see more development in the non-hydropower renewables sector over our ten year forecast period, tapping into underdeveloped wind, geothermal and solar power potential.
BMI View: The Swiss telecoms market takes advantage of high-income households and a willingness to pay to top services which drive ARPU, but the dominance of incumbent Swisscom remains a concern. Price-cutting has failed with operators, including the new entrant Salt Mobile, competing on services, but Swisscom continues to call the shots, as highlighted by its move for convergence to consolidate its leadership in a saturated market.
There were 10.75mn mobile subscribers in Switzerland as of Q215, a y-o-y growth of 0.7%. Swisscom continues to dominate the market with a share of over 60%.
The incumbent reported 1.3mn bundles, 10.5% of its overall customer base, with 278,000 quad-play customers.
The move towards convergence has helped the incumbent in the pay-TV market, catching up with market...