Swissmem industry association, the industry body covering the machinery, electrical engineering and metal (MEM) sector, has expressed concern over growing disruption to supply chains and how it could come to affect Swiss manufacturers and consumers in the coming months.
In an interview with SRF radio on April 23, Martin Hirzel, the president of Swissmem, said that an imminent improvement on global markets was “not even wishful thinking anymore”, adding that the disruption caused by the COVID-19 pandemic and then the war in Ukraine has put great strain on existing supply networks. Hirzel said that the crises have thrown supply chains “completely out of step” and that while demand is now recovering, pending orders can often not be delivered on time due to delays overseas.
One of the strongest factors at the moment is the lingering COVID-19 measures in large Chinese manufacturing such as Shanghai, which also plays a crucial role in transportation. The megacity is now in its fourth week of lockdown, meaning that people are unable to attend work and creating a backlog of shipments waiting to be offloaded and reloaded at the port of Shanghai, causing delays to deliveries across the globe.
Switzerland’s reliance on China for imported goods has increased over previous years and China now accounts for 7 percent of all Swiss MEM exports. It is therefore unsurprising that the Shanghai lockdown may impact Switzerland’s supply chain significantly, especially now that more Chinese cities including Beijing could also be placed in lockdown in the coming days and weeks as COVID-19 cases surge and the government orders more mass testing.
Despite the disruption, the Swissmem president seems optimistic that the industry won’t be looking to de-globalise its supply chain any time soon. While Swiss manufacturers are looking for suppliers closer to home at the moment, it seems unlikely that China will become irrelevant to the Swiss MEM sector after COVID-19 measures are dropped.