Eastern Switzerland’s Exports Set Records: Business Activity Soars in SGBA Industries

The economy of the St.GallenBodenseeArea (SGBA) currently isn’t just humming nicely, it is setting benchmarks within Switzerland, as well as globally. At “Horizons”, a series of presentations organized by the Cantonal Bank of St.Gallen earlier this year at various venues in the SGBA, Peter Eisenhut, an economist specializing in Eastern Switzerland’s business activities diagnosed an actual boom in the region since last year.

Bolstered by healthy growth environments in the European Union and the US (both at roughly 2%), and by an ongoing sturdy business climate in Asia (with growth rates of 6% on average), Eastern Switzerland managed to position itself at the forefront compared to the rest of the country: Strong productivity growth (5,2% since the „Great Recession“ from 2008, vis-a-vis 2,9% in the “Espace Mittelland” of Western Switzerland and 2,6% in the Northwest) and a robust labor market helped the SGBA excel.          

Propelled by tailwinds of a stronger European currency, an already solidly performing exporting industry proved key for furthering the boom in the regional economy of the SGBA: Last year, Eastern Switzerland’s exports to the Eurozone grew by an astonishing 8% (compared to average export growth rates between 3-4% in other business areas). 2017 produced the highest export levels of goods and services from the canton St.Gallen ever.

Powered by heightened global demand, production levels of the SGBA’s manufacturing industry soared significantly. Accordingly, the degree of machine capacity utilization had increased to 88% by January 2018. Which in turn should further result in rising equipment investments in the coming months, according to Eisenhut.

A prime example for this trend is SFS Group in Heerbrugg in the SGBA: To meet the global demand for high-precision custom-made engineering components, the precision technology manufacturer announced an investment of 50 million Swiss Francs into an expansion of its production site in the SGBA already in last November.

The implication of these developments is not only that exporting industries in Eastern Switzerland are experiencing a welcome boom right now. A two-way dynamic between high quality exports and substantial investments in the SGBA location also provides the groundwork for sustainable growth and further quality refinement in the economic inventory of the SGBA as a whole.

For more information you may download the „Horizons“ presentation (in German): https://www.sgkb.ch/de/ueber-uns/horizonte