For months, the government, unions, business leaders and researchers have all warned that the strong franc and the weakening global economy would lead to an increase in Switzerland’s jobless rate. October figures appear to confirm these fears.
A total of 3,834 people registered with employment offices around the country in October, a figure much higher than the 383 that did so in September, according to data offered on Monday by the State Secretariat for Economic Affairs (Seco).
This is the first time that Switzerland’s jobless rate has risen since January 2010, when unemployment peaked at 4.5 percent due to the global economic and financial crisis. Since then, the country had been recovering steadily.
Two thirds of the October increase is accounted for by seasonal employment, with almost half of the jobs lost coming from the hospitality industry, said the head of the Directorate of Labour, Serge Gaillard. Consequently, the cantons of Graubünden and Valais were especially hard hit by rising unemployment.
In general, the German-speaking cantons are better positioned, with an average rate of 2.4 percent. French-speaking cantons and Italian-speakng Ticino have an average unemployment rate of 3.4, well above the national average.
Among women, unemployment reached 3.2 percent, compared to 2.7 for men. The rate was also much higher among foreign nationals (5.7 percent) than Swiss citizens (2.1 percent).
The labour directorate expects the unemployment rate to continue to rise during 2012 before stabilising at around 3.4 percent. Gaillard predicted that a continued over-valuation of the franc could lead the jobless rate to reach 3.7 percent.
In recent weeks, some of the largest companies in Switzerland have announced job cuts, including Novartis, Roche, Credit Suisse and UBS, with the strong Swiss franc putting a dent in profits.
In order to prevent further lay-offs, the country’s largest business organization, Economiesuisse, is asking the Swiss National Bank to again take steps to weaken the Swiss currency.
“I hope that the central bank will increase the exchange rate when the opportunity comes,” Economiesuisse president Gerold Bührer told newspaper SonntagsZeitung.
This view is shared by Hans Hess, president of Swissmem, the umbrella group for the Swiss mechanical and electrical engineering industries, and by Emmanuel Probst, chief executive of coffee machine maker Jura.
“Many companies are not competitive with a 1.20 franc-euro exchange rate,” said Hess, who argued for a rate of 1.35 francs to the euro.