| Actual | Previous | Revised | |
| Balance | CHF4.445B | CHF3.609B | CHF3.463B |
Highlights
The trade surplus widened in February to 4.4 billion Swiss Francs in nominal terms from a revised 3.5 billion in January as a 2.7 percent decline in exports was outpaced by an 8.3 percent drop in imports which saw broad-based declines in all major sectors.
Exports of pharmaceuticals were the primary driver behind the fall in exports. These fell 28.9 percent in February, more than reversing a 19.8 percent increase the month before. At the same time, watch exports were positive, up 1.3 percent over January when the fell 0.5 percent. Total exports of time pieces stood at 2.182 billion in February. Imports of chemical and pharmaceutical products fell 8.3 percent in February after contracting 0.6 percent the previous month.
Trade with the United States revealed that exports grew 21.2 percent in February after the fell 7.5 percent the month before. Imports on the other hand fell 28.6 percent following a 32.5 percent decline in January.
Such swings in trade flows are likely to continue in the coming months in the face of the conflict in the Middle East. Oil flows are being disrupted, while critical chemical inputs for a broad range of industries are being disrupted. It's very likely that chemical prices will also rise in the coming months which will influence nominal, or value-based trade. Higher prices could in turn effect trade in real, or volume-based trade as well.
Definition
The merchandise trade balance measures the difference between the total value of Swiss merchandise exports and imports. The focus is on the balance of trade in goods, excluding precious metals, gemstones, works of art and antiques. This is provided in unadjusted and seasonally adjusted measures for cash and volume.
Description
Changes in the level of imports and exports along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the Swiss franc in the foreign exchange market. Switzerland's major trading partners include Germany, France, Italy and the United States. While Switzerland still exports large amounts of traditional products such as chocolate and watches, more than half of Swiss exports are in mechanical and electrical engineering and chemicals today. A positive trade balance indicates a trade surplus while a negative balance represents a trade deficit. Trade surpluses indicate that foreigners are buying more Swiss goods, which are typically paid for in Swiss Francs. This translates into greater demand for the currency and upward pressure on the value of the Franc. However, if the balance is a deficit, Swiss consumers are buying goods from trading partners which translates into higher demand for foreign currencies placing downward pressure on the value of the Franc.