Swiss Pharma: A Dangerous Industrial Optical Illusion

What crisis? A superficial look at Switzerland’s second-quarter economic figures makes the question seem justified. While its eurozone neighbours struggled to record 0.3% growth, Switzerland’s gross domestic product rose 1.5%, its best performance in five years.

That result naturally invites satisfaction. Swiss companies have shown resilience, and the country’s economy appears to have outperformed much of its immediate surroundings. But the editorial urges readers to adopt a distinctly Swiss habit: look for the flaw, and prefer the glass half empty to the cup filled to 50%.

The weakness is not hard to find. Chemicals and pharmaceuticals accounted for two-thirds of the growth recorded in the quarter. Their contribution is so large that it obscures a more subdued economic situation in the factories Switzerland likes to portray as better protected from deindustrialisation than those elsewhere in the Western world.

The 1.5% figure therefore offers an incomplete picture. Switzerland has achieved a notable result, but the performance depends heavily on a narrow part of its industrial base. Behind the impressive headline, the broader manufacturing climate looks considerably less healthy.