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Sfr strength hit nearly half of Swiss firms in Q4-SNB
December 24, 2010 / 11:50 AM / 7 years ago

Sfr strength hit nearly half of Swiss firms in Q4-SNB

* SNB publishes quarterly monetary policy report

* SNB sees strong Swiss franc weighing on foreign trade

* 45 percent of companies reported Sfr had negative impact

* Up from 28 pct in July and August

ZURICH, Dec 24 (Reuters) - The strong Swiss franc weighed on nearly half of all companies surveyed by the Swiss National Bank in October and November for its quarterly monetary policy report, the central bank said on Friday. Manufacturers had had to battle most with the steep appreciation of the franc, the SNB said in its quarterly report, prepared ahead of its interest rate decision last week.

The SNB said 45 percent of the companies reported a negative impact on business activity, above the 28 percent recorded when the survey was carried out in July and August.

The franc has soared over 15 percent against the euro this year, hitting fresh highs, and Swatch Group UHR.VX chief Nick Hayek warned in a Reuters interview on Thursday its appreciation could have far-reaching consequences for Switzerland. EURCHF= [ID:LDE6671FF]

A total of 244 companies took part in the survey, which showed manufacturers of chemical products and plastics, the metal and textile industries as well as the capital goods sector, including big segments of the machine industry, had been hit hardest by the strong franc.

Analysts at Kepler Capital Markets expect earnings forecasts for Swiss firms to be cut by 3 to 4 percentage points due to the franc as many firms take a hit to their margins as currency hedges roll off.

Swiss companies in general said they were still likely to employ more staff and that they expected turnover to rise.

The quarterly report also echoed the central bank’s latest assessment of the economy.

The SNB kept rates ultra-low last week as the euro zone debt crisis has pushed up the Swiss franc and this is likely to hurt the export-dependent Alpine country further. [ID:nLDE68D1IK] (Reporting by Katie Reid; Editing by Toby Chopra)

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