The Raiffeisen PMI PME index has certainly progressed in June, but the morale of exporting companies remains gloomy.
The negative effects of American customs tariffs are starting to be felt. At the same time, SMEs do not expect a resumption of demand in Germany in the second half, as shown by a special investigation.
The Raiffeisen PMI PME index increased from 50.5 to 52.4 points in June. This positive development is mainly to be attributed to companies focused on the domestic market. These recorded a robust request, which is reflected in particular in the command component, up 53.2 to 54.1 points. On the other hand, the situation has remained d heodest for exporting SMEs. Their order notebooks stagnated in June. The latest official figures for Swiss foreign trade suggest that the situation is getting worse. Exports fell in many sectors in April and May. This is particularly true for the metallurgical industry, probably the hardest hit by the new American customs tariffs. It is subject not only to the basic law of 10%, but also in part to additional special rights of 50% on the steel and aluminum components.
Little hope for Germany so far
The perspectives are nevertheless dark for SMEs. Many, active as subcontractors, are closely linked to large exporting companies whose commercial situation has been clearly deteriorated in recent months, as shown in the index of the purchasing directors of Proc.ch. Like large companies, SMEs are reluctant to hire. Thus, the PMI SME employment component remained in June at 48.9 points, below the growth threshold of 50.
Meanwhile, uncertainty linked to customs duties remains very high. Customs negotiations with the United States hardly increased and the period for suspending reciprocal customs duties of 31% already expires on July 9. It remains to be seen whether there will be a new postponement – and the American customs policy remains difficult to calculate.
In addition, there are always few impulses of demand from the euro zone, in particular from Germany. According to a special Raiffeisen survey, more than half of the exporting companies questioned report a drop in demand in Germany. Only 12% see an improvement at present. The expectations for the second half are in the meantime moderate. Only a quarter of SMEs expect a slight resumption of demand in Germany. Most of them expect to stagnate orders and around 20% fear a new decline.
What do you think of the current evolution of demand in Germany?
Do you expect an evolution of demand in Germany in the next six months?
