In the 1986/87 hydrological year ( October to September ) , consumption of electric power rose by 2.4% to 43.3 billion kwh ( previous year : +3.9% ) . Consumption by households , trades , agriculture , services and industry increased by approximately 2.4% , while consumption by the railroads went up by only about 1% .

At 56.7 billion kwh , total electric power production by Swiss power stations showed a gain of 1.6% over the preceding year . Hydroelectric power generation rose slightly ( 1.6% ) to 34.1 billion kwh . Production by conventional steam plants climbed by about 30% to 1.1 billion kwh . Thanks to the continued above-average operating times ( by international standards ) of the Swiss atomic plants in Beznau , Mühleberg , Gösgen and Leibstadt , nuclear power production displayed a slight rise to 21.5 billion kwh . The share of nuclear energy in aggregate Swiss power production edged down somewhat to 37.8% . However , in the winter half-year it amounted to 47.3% .

Electric power exports , which consisted primarily of surplus energy , declined by 14.1% to 21.1 billion kwh , while energy imports dropped by 20.5% to 12.7 billion kwh . The resultant export surplus decreased from 8.6 billion kwh to 8.4 billion kwh ( winter half-year : 0.8 bill. kwh ; summer half-year : 7.6 bill. kwh ) .

In 1988 , there will be several energy policy decisions to be made by Switerland's parliament and people , such as an energy article for the constitution with a control tax , investigation into alternative energy sources and referendums concerning moratoriums and alternative sources . A rapid exit from nuclear energy would entail disadvantages for the environment and economy and spell sacrifices in terms of comfort .

The situation on the international crude oil market featured ample supplies and , consequently , relatively low prices . Although OPEC made various efforts to exert a stronger influence on the market , its success was limited and of short duration . The tensions in the Gulf had no lasting effect on the price of crude . On the other hand , the growth in global demand leveled off in view of the fact that the drop in the price last year led to substantial inventory buildup .

On the Swiss oil market , too , conditions normalized . In the first nine months of 1987 , sales slipped back to their long-term average . This meant a decline in sales of extra light and heavy fuel oils at the wholesale level of 17.2% and 19.2% , respectively , due to the reduction of inventories . In contrast , there was an uptrend in sales of all propellants ; gasoline sales rose 3.0% , diesel fuel 5.3% and aviation fuel 3.2% . For the first three quarters of 1987 , wholesalers recorded an overall decline in sales of 9.4% to 8.71 million tons .

Sales of unleaded gasoline were further promoted and in September had already reached 28.2% of total sales , which in Europe is a leading position . On July 1 , 1987 , Switzerland also became the first country to reduce the sulfur content of extra light heating oil and diesel fuel to 0.2% . This assures the reduction of the sulfur content to the 1950 level within a short time .

The income picture in the petroleum processing industry deteriorated strongly , as the selling practices ( especially net-back contracts ) introduced by the producer nations in the preceding year again deviated from conventional forms . Due to the poorer capacity utilization , importers and retailers also suffered a downturn in earnings .

For 1988 there are no signs on the international or Swiss markets that either supply or demand will show any significant change . Consequently , no major price corrections are anticipated .

Sales of natural gas increased by 4.5% . The thriftier use of energy due to greater concern for the environment and a generation of more efficient equipment exerted a breaking effect on growth compared with preceding years . In the period from September 1986 to September 1987 , the price of industrial gas contracted by about 27% and that of household gas by approximately 5% . The maximum output of the Swiss high-pressure grid of 3,000 megawatts is equivalent to the output of three nuclear power plants . Current capacity reserves amount to about 20% .

In order to better diversify natural gas supplies , a natural gas storage and transport agreement was concluded with Gaz de Franz for a period of 30 years . In its underground storage facilities north of Lyon , Gaz de France will provide capacity to cover peak periods . This agreement necessitates the construction of a new natural gas pipeline 108 kilometers long from Etrez into Switzerland . In November 1987 , a contract was concluded with Ruhrgas AG for the delivery of Russian natural gas . This contract will run for 20 years and can be extended . If there is a lapse in Russian deliveries , Ruhrgas AG is obliged to take up the slack . Over the medium range , these deliveries will make up 16% of aggregate Swiss natural gas purchases .

In Switzerland , efforts to supply natural gas to new areas continue . In the Ticino , a pipeline was laid in the Lake of Lugano , and applications for concessions have been made in Zug and Chur . Further development projects are in progress for Glarus , Gaster and March , Oberaargau and Schwyz .

In the equipment field , good sales of new Low-Nox burners , which strongly reduce the emission of nitrogen dioxide , were recorded . There was also a favorbale trend in sales of gas condensation boilers , which already make up a quarter of all gas boilers sold and save up to 15% on energy consumption with low-temperature heating units .

In 1988 , the Swiss federal government will make use of various scenarios to display how electricity can be generated by means other than nuclear power . In this connection , natural gas the third most important energy source will play a significant role . District heating plants , which use gas motors or turbines to produce electricity and heat with the warmth generated , are becoming more and more interesting .

The demand for services by the Swiss Federal Railways developed in opposing directions for the two main sectors , with passenger service on the increase and freight transport in decline . In the first nine months of 1987 , the number of passengers grew by an estimated 10% . The number of tickets sold climbed by 13% to approximately 192 million , including some which cover travel later on ( all-day passes , season tickets ) . The upswing was entirely due to increasing domestic travel , spurred on by schedule improvements and lower fares through better Federal funding . Since November 1986 , over 1.3 million half-fare passes costing Fr. ?100 have been sold . Including the Federal subsidy to fares ( Fr. ?39 million ) , profits from passenger transport rose by 6.1% to a total of Fr. ?960.3 million , although income from international passenger service dropped by 1.6% .

Freight service suffered a 5.5% volume decline to 31.5 million tons , and profits dropped to Fr. ?825.3 million , a decrease of 5.7% over a year earlier . Within the various sectors of transport , however , wide contrasts characterized profits . Domestic transport dropped by 3.9% , the sharp decline occurring in chemicals and steel transport . The downswing in export volume ( 7.9% ) and import volume of transport ( 12.3% ) was mainly due to stagnating trade in steel and oil products . Also transit service on both of the main railway lines suffered a 5% decline . On the other hand , a 2.3% upswing characterized combined cargo transport ( piggyback +1.1% , containers +3.4% ) . A volume increase of 2.6% for domicile cargo was achieved through the favorable development of marketing and supply of services .

Under the new performance agreement which became effective at the beginning of the year , Swiss Federal Railways assumes the costs of operations and rolling stock , while the federal government assumes financial responsibility for infrastructures . In addition , the government covers costs for community services in the form of regional passenger and piggyback transport . Swiss Federal Railways also pays a part of the cost of infrastructures , a sum previously fixed , amounting to Fr. ?211 million in 1987 .

Based on developments in the first 9 months of 1987 , Swiss Federal Railways expects to balance the books by its revenues . Earnings probably will not cover the budget goal of Fr. ?4.6 billion , however , although cost-cutting measures have strongly reduced expenditures .

On the basis of the performance agreement , the estimated profit and loss account for 1988 anticipates a balanced budget , with Fr. ?4.7 billion on both sides of the ledger . Further improvements in services offered and growing environmental awareness should result in a upswing for passenger transport , although the strong rate of growth in 1987 will probably slacken off somewhat . Returns from all sectors of passenger service have been budgeted at Fr. ?1,274 million ( +2.5% above estimated results for 1987 ) . Freight transport is expected to slacken off especially in domestic and import demand due to some general economic stagnation , whereas export transport is expected to see a slight upswing . Since the highly competitive business atmosphere will keep prices under control , earnings as projected at Fr. ?1,176 million will be only 1.5% higher than in 1987 . Federal funds for community service transport amount to Fr. ?536 million , of which Fr. ?514 million go to passenger service and Fr. ?22 million to piggyback transport .

On the expenditure side , the budget includes a cost of personnel increase of 3.6% to Fr. ?2,629 million . In addition to cost of living and pension fund increases , due partly to a new flexible retirement policy , the higher expenditures were also the result of personnel increases . With 37,944 employees , the number of personnel has grown by approximately 630 persons since mid-1987 . Material costs were higher partly due to rising inflation but mainly because of the steep rise in maintenance costs on fixed investments and rolling stock . Depreciation and interest payments increased proportionately to greater investments and to indebtedness from new investment activity .

In the cost estimate for the separate 1988 infrastructure balance sheet , expenditures for maintenance , depreciation and interest on fixed investments have been entered at Fr. ?826 million , of which the federal government assumes Fr. ?704.5 million . The investment budget , at Fr. ?1.48 billion , is 17% higher than in 1987 . Available funds are earmarked mainly for the renewal of buildings and equipment , for completing constructions and for acquisitions ; Fr. ?169 million have been allocated for environmental measures , a budget item initiated in 1986 , including ones to make passenger service more attractive .

The favorable development of the economy led to a growth in sales of all the important PTT services . On the basis of the results for the first nine months of 1987 , the PTT anticipates an increase in its services of 5.4% for the entire year , the largest gain in two decades . In the telecommunications sector , where strong increases were recorded in long-distance calls and tele-information services , growth amounted to 6.6% , while postal services advanced by 3.9% .

The PTT budget for 1987 targeted a profit of Fr. ?456 million . However , due to the financial development in the first nine months market value and revenue figures exceeded prognoses , while inflation remained low and spending discipline was practiced the PTT's profit may surpass Fr. ?500 million .

The continued strong demand for PTT services , low inflation and further measures to cut costs augur favorable profit figures for 1988 . With total revenue of Fr. 9,314 million and total expenses of Fr. 8,964 million , the PTT estimates a profit of Fr. 350 million for 1988 . The aggregate figure includes another rate reduction planned for 1988 that would trim income by Fr. ?125 million . The increase in sales of PTT services is budgeted at 4.6% ( postal services : 2.4% ; telephone : 6.3% ) . The introduction of new and improved services as well as new large-scale projects will entail raising personnel rolls by 995 persons . To expand the PTT's infrastructure , especially the capital-intensive telephone and tele-electronics sectors , investments of Fr. 2,953 million are budgeted , while Fr. ?170 million will be credited to the government's account .

In the postal service sector , express delivery services will undergo special expansion . The international Express Mail Service ( EMS ) to 66 countries is now available at all of the larger post offices . The regional postal messenger service ( PTT-Rapid 142 ) , which has been in operation in Zurich since 1976 , was extended to Basle , Bern , Geneva and Lausanne . This express messenger service , which can be utilized around the clock by dialing the number 142 , assures delivery of a wide range of objects within one hour in agglomerations mentioned above .

In the telecommunications sector , the initial network of the mobile NATEL-C telephone system , with a capacity of 25,000 hookups , was introduced in the Zurich area on September 15 , 1987 . In conjunction with the Swiss Federal Railways and the BLS , the project [ Telephone in Zug ] was completed toward the end of 1987 . With the introduction of the Videotex ordinance on January 1 , 1987 , the PTT was given the greenlight to develop this service further . In collaboration with industry , plans were made for the trial run of the universal telecommunications network [ Swissnet ] in 1988 . The selection of telephone receivers was enlarged by the addition of [ COMTEL ] , which enables conversations and connections with Videotex data banks to be carried out simultaneously .

The greater fluctuations in demand of late and the related reschedulings at short notice required a more flexible range of aviation services . Economic and political factors led to significantly reduced capacity on Middle Eastern and West African routes . Swissair had to sharply curtail its flights to these regions , which was a blow to the Airbus A313 Intercontinental , as this aircraft was procured especially to cover these medium-range routes . Furthermore , Swissair's destinations in Dublin , Colombo and Santiago de Chile were also dropped from its flight program . Conversely , on North Atlantic routes , Swissair established a new link to Atlanta ( USA ) . Furthermore , in Europe , the major industrial center Turin was introduced to the flight schedule through the intermediary of Crossair . Overall , the range of flight services displayed a 4.7% yearyear expansion in the first 10 months of 1987 , with Swissair now linking 104 cities in 69 countries .

After the sluggish trend in the preceding year , which was characterized by Americans postponing their trips abroad , demand registered a significant rebound once again in 1987 . During the first 10 months of the year , passenger traffic rose by 6.5% to 11,741 million , while freight and mail traffic increased by as much as 7.8% to 640 million ton-kilometers . With this improved performance offset against the increased range of services , the average load factor went up from 62.5% to 63.8% . In terms of passenger traffic , the North Atlantic routes recorded the biggest rise ( +16% ) , boosted not only by the new connection to Atlanta but also by the other destinations . European ( +10% ) and Far Eastern ( +8% ) flight traffic also contributed to the positive trend , while Middle Eastern ( 6% ) and African ( 3% ) routes sustained a dip in passenger volume . The major setback on South Atlantic routes ( 12% ) can be attributed , aside from the cancellation of flights to Chile , to the unfavorable economic situation in Argentina .

The brisker flow of traffic on the two major European and North Atlantic networks also had a positive impact on income . But dollar-related currency losses aggregating Fr. ?250 million for the first 10 months of 1987 were considerable ( 1986 total : Fr. ?460 million ) . Only two thirds of this amount could be compensated by cost cuts , as roughly 60% of ticket sales were effected abroad ; only 40% of outlays , on the other hand , are calculated in foreign currencies . Overall , scheduled flight operations displayed an improvement from the preceding year , although they still fell short of the breakeven point . Income from services provided to other airlines , including technical work on aircraft , passenger and freight processing at Swiss airports and the supplying of prepared meals , registered a substantial improvement and made a major contribution to Swissair's positive business results .

The pressure on tariffs related to the relaxation of restrictions in world aviation is again likely to curtail earnings growth in 1988 . Optimistic traffic prospects and measures already introduced to cut costs have raised expectations that the breakeven point will soon be reached for flight operations .

Aside from the introduction of the global reservation system [ GALILEO ] , which has assumed primary importance in the battle for market shares , a 6% increase in capacity has been earmarked for 1988 . At the same time , the flight network will be further expanded , with the fleet of aircraft being modernized and enlarged . At the end of 1987 , the fifth largest wide-bodied aircraft ( B-747 ) was added to the Swissair fleet and , in 1988 , the remaining ten DC-9s were replaced by 11 more modern and quieter models , including 8 Fokker F-100s with 85 seats apiece for scheduled flights on shorter or less popular European routes . Following an increase by 300 to roughly 17,800 employees in 1987 , Swissair will probably expand its personnel rolls once again in 1988 .

Capacities in worldwide shipping were for the most part well utilized . The main impetus came from an increase in the transport of crude oil and grain . Because of the rising demand for cargo space , again only very few ships were scrapped , and many freighters that had already been stripped were put back into service . Since the low freight transport rates in recent years had resulted in very few ships being built for use by 1987-88 , over-capacities virtually disappeared in 1987 and rates climbed upwards again .

The cost of shipbuilding went up in the major shipbuilding countries , including West Germany , Japan , South Korea and Taiwan , as a result of rising currency exchange rates due to the dollar's plunge . In the shipping trade it is hoped that the growing demand will not bring a flood of orders for new ships , later causing over-capacity and another drop in shipping rates as in the past few years . To cut costs , many ships , mainly from Europe and Japan , have relinquished their own nation's flag in favor of one which allows them to pay lower wages to the crews .

Although the Swiss merchant fleet was reduced to 28 ships by the end of July 1987 , the transport capacity increased to 576,074 gross registered tons . Included in the fleet were 3 container and multi-purpose ships , 14 bulk carriers , 7 tankers for wine and chemical products , 2 refrigerated ships and 2 rollroll-off ships . Crews totaled 536 persons , of which 25% were Swiss . The Swiss fleet finds it increasingly difficult to stay competitive in international shipping due to much higher salary levels compared to other nations on the one hand , and on the other due to the protectionist measures in shipping line services which prevent countries like Switzerland from receiving contracts .

In the first ten months of 1987 , the turnover of goods in the Rhine ports of both Basle-City and Basle-Country decreased by 13.3% ( as against the year-earlier period ) to 6.72 million tonnes . The main reason for this decline was the unfavorable development in the first half of 1987 which could no longer be offset by the subsequent increase in traffic . The situation on the oil market caused a drop in the import of liquid fuels and combustibles . The continuing crisis in the West European steel industry also had adverse effects on the transport volume .

As regards Rhine shipping in general , the earnings potential continues to be affected by an overcapacity of shipping space and the ensuing drop in freight rates . Swiss shipping companies , which mainly operate ships to and from Basle , are also being particularly hard hit by sharper competition because , as stipulated in the relevant international contracts ( "Mannheim Charter" ) , freight charges may be fixed according to supply and demand in the case of international traffic between Rotterdam and Basle , whereas in the case of inland traffic in the Netherlands and West Germany protectionistic measures are in force . Since earnings were higher in these traffic regions , foreign shipping companies were in a position to finance the operation of ships to and from Basle utilizing the profits they obtained from inland transport as a "bolster" .

In 1987 , Swiss Rhine shipping companies also offered resistance to being handicapped by the tariff practises of the Swiss Federal Railways . The issue under debate was whether the rail transportation rates for goods transferred at Basle from ship to rail should be reduced to the same level as the rates charged for goods transported the whole way from

Hotels , the backbone of Switzerland's tourist trade , were again relatively prosperous following a slight decline in the previous year . Measured by the number of overnight stays , one of the best years of the past decade was achieved . The weather scarcely gave reason for high expectations : in some areas the 1986-87 winter season got off to a slow start due to poor snow conditions , in Ticino bad weather initiated the spring season and in several regions a rainy summer culminated with disastrous flooding . A slight uptrend despite the unfavorable conditions can be attributed to the high quality standards in Swiss hotels and to good fall weather , increasingly the trademarks of Switzerland as vacationland . Thus in October 1987 a new record was achieved for overnight stays , 2.61? million , due mainly to a 5% increase in guests from abroad .

In the first 10 months of 1987 , overnight stays reached a total of 30.79? million . This was 91,000 or 0.5% more than in the same period of 1986 . Although the January to October results were 4% lower in 1987 than in the record year of 1981 , they were 2% higher than the average for the past 10 years . While the number of Swiss overnight guests increased by almost 1% over 1986 to 12.94? million , hotel guests from abroad declined to 17.85? million . In terms of the country of origin , there were widely varying developments for Swiss tourism . Following the previous year's decline of 37% for the number of hotel guests from the United States , in 1986 there was an upsurge of 14% to 2.2? million persons . Hotel guests from West Germany , as foremost country of origin registering 5.7? million overnight stays , were as faithful as a year earlier . On the other hand , fewer guests from Great Britain ( 10% ) and France ( 5% ) spent their holidays in Switzerland . From January to September 1987 there were also differing trends in overnight stays according to region . Upswings in northwest Switzerland ( +3.5% ) , central Switzerland ( +3.4% ) , eastern Switzerland ( +2.2% ) and Valais ( +1.5% ) contrasted with downtrends in the Bernese Oberland ( 2.3% ) and Grisons ( 1.1% ) .

In the first 9 months of 1987 Switzerland's supply of hotels reached an average 7,150 with a total of 276,006 beds . This was an increase of 70 hotels and 1,363 beds over the previous year . Thus on the average , 42.9% of available accomodations were occupied compared to 43.3% a year earlier . In the large centers , occupancy declined by 0.6% to an overall 52.3% . Vacationers are increasingly demanding the same level of comfort for an overnight stay as they enjoy at home . Although the hotel industry is making every effort to upgrade accommodations by installing baths , showers and other improvements , there still exists an undersupply in this respect . Even if more comfort means higher prices , it has been shown that the rate of occupancy goes up as well . Following the decision by both houses of Parliament to increase funds to the Swiss Hotel Loan Association over the next ten years , the Swiss hotels can speed up renovation schedules . Thus the changing needs and demands of hotel guests can be met and the industry can compete better on an international basis .

The situation concerning the economical operation of Swiss hotels deteriorated somewhat . With the introduction of the compulsory five-day week for all hotel and restaurant employees , personnel costs climbed steeply . The increases could only partially be absorbed by raising prices .

The hotel industry still lacks sufficient numbers of employees despite intensive efforts to train young people . In 1987 for the first time there was a decline in the number of apprentices , which means that the personnel problem will only intensify . Thus the entire industry remains strongly dependent on foreign workers . Furthermore , the image of the hotel profession will have to be improved upon , the conditions of employment made more compatible with the other services and the various training possibilities made known .

In 1987 the Swiss Hotel Association opened two new schools to supplement its mainstay up to now , the Ecole hôtelière in Lausanne . On October 26 the Swiss Hotel Association Hotel Management School in Bluche/Crans-Montana opened its doors . The training program will take three years at this hotel management school for English-speaking regions . On November 2 at the new Höheren Gastronomie-Fachschule in Thun , 70 students started in the first semester . Training at this first management school for the food and beverages sector will take 2 1/2 years ; the program can accomodate 144 students .

The outlook for tourism in the 1987-88 winter season is generally bright . In reply to a UBS inquiry , a majority of the directors of tourism in 40 major touristic regions were optimistic that the number of overnight stays will increase or at least remain at previous levels . For 1988 as a whole , the hotel industry will have to be satisfied with results at 1987 levels , in view of the generally weaker economic growth and still deteriorating dollar exchange rate at the end of 1987 .

The most substantial growth in turnover since 1980 was achieved in the 4th quarter of 1986 . For the majority of restaurants this positive turnover development continued in 1987 as well . In the first quarter of 1987 , 58% of restaurants recorded an increase in turnover , 19% reported no change , and 23% suffered losses . There were no major changes in the 2nd quarter , with the corresponding values amounting to 62% , 12% and 26% . In the second half of the year , the positive turnover trend began to flag somewhat . Since inflation rose slightly in the course of the year , the real turnover growth rate ought to have slowed down a little .

Trends again varied depending on the category of restaurant . The medium-sized and large restaurants in particular once more recorded sales increases , whereas most smaller-sized restaurants reported either stagnating sales or even a slight sales declines .

There were also regional differences . Business developed more favorably in Western Switzerland than in Central Switzerland and the Alpine regions . In the first half of the year , approximately 60% of all restaurants in Western Switzerland registered an increase in turnover , 20% recorded no change , and around 20% suffered a decline . For the Alpine regions and Central Switzerland , the corresponding figures were 50% , 25% and 25% .

The generally gratifying turnover picture was , however , tainted by the development of costs . What had quite a major effect was the further increase in personnel expenditure due to the fact that as from July 1 , 1987 , the five-day working week became mandatory for all restaurants . Since the restaurant business is turning increasingly into a service sector , with the actual sale of goods losing more and more significance in terms of expenditure , accounts are reflecting higher and higher personnel costs . The share of other expense items only changed minimally . As a result of this development , the earnings situation continues to be a great problem for many restaurants .

Business in 1988 is expected to entail considerable risks . For example , with the existing national collective labor agreement expiring in mid-1988 , there is uncertainty as to how personnel costs will develop . Negotiations on a renewal of the agreement were still in progress at the end of 1987 . There is also uncertainty as to what repercussions the weaker dollar will have on both the tourist trade and the actual restaurant business . Nonetheless , prospects are still viewed with a certain amount of optimism . The Swiss restaurant business has , after all , succeeded in adjusting to altered conditions thanks to its structure - which is characterized by small operations - and the large number of family-run businesses .

Since business had been moderate in 1986 due to exceptional circumstances , a backlog demand was expected in 1987 . In addition to this , positive developments were predicted in respect of those basic general conditions relevant to the travel agency business ( leisure time available , disposable income , economic prospects , occupation , etc. ) . In anticipation of an increase in demand , travel agents extended their capacity , and in some cases quite substantially . In spite of the rising demand and growing sales , in the first half of the year the market witnessed an overcapacity manifesting itself in the form of special offers . The fact that more and more customers began to book at shorter notice also resulted in larger quotas of unsold travel and hotel accommodations having then to be sold at greatly reduced prices .

Demand in the second half of the year was more positive than anticipated . For certain destinations ( e.g . Oceania , USA ) there were even increasing occurrences of capacity bottlenecks . Booking figures in September and October in particular were very gratifying .

This positive sales growth is marred by the moderate earnings trend . As in previous years , competition on the market was sharp . The permanent wave of new travel agencies opening up rather aggravated the situation . Since competition is primarily reflected in prices , profit margins were narrowed . Special offers were also another major factor contributing to the unsatisfactory earnings trend . Furthermore , an increasing number of customers bypassed travel agencies and turned to new channels of distribution to book package tours , which as well as entailing no difficulties are also highly profitable .

The sales rise in the current business year and the resultant need for additional travel agent staff produced a greater shortage of qualified personnel . More attention must be focused on this problem in future .

Provided those factors which have a crucial effect on demand in the travel agency business develop positively as expected , an increase in sales figures is also likely in 1988 . The favorable picture in respect of advance bookings for 1988 - especially for the winter season - provide initial pointers . No major improvement is expected as far as the earnings trend is concerned . The introduction of an integrated information and reservation system ( Travi-Swiss ) represents a new cost factor , the effects of which on earnings can not yet be estimated with certainty . Whether this new surge of automation will have a positive influence on the earnings power of travel agencies as early as in 1988 is more than doubtful .

Amid sales losses and narrower gross margins , the business results achieved by the import and wholesale trade were generally just about satisfactory . As the survey carried out by the Association of Swiss Importers and Wholesalers shows , business in this sector has been continually flagging since the five-year high which was attained at the end of 1985 and lasted through to early 1986 .

In the third quarter of 1987 , the only categories to register sales increases were pharmaceuticals , paints , varnishes , fats , oils , toys , machines and tools . Other categories which recorded good to satisfactory results in the previous quarters suffered losses . The trade segments affected most were paper , stationery and books , technical products , iron , electrical equipment , glass , porcelain and earthenware , office organization , office material and machinery , and photographic and cinema equipment . In the case of food , textiles , chemicals and electrical household appliances , business was just about satisfactory . Categories in which sales growth slowed down were construction materials , fine steel , commercial steel , metals , construction machinery , components and vehicles . Business was unsatisfactory in the case of jewelry , cereals and fodder , combustibles and fuels , and scrap . Some of these categories recorded a five-year low , and there are no signs that this trend will change .

On account of the unstable currency situation , the import and wholesale trade endeavored to shorten storage periods . However , importers and wholesalers continued to guarantee supply by keeping inventories at an adequate level despite the higher turnover rate .

The sector as a whole expects business to contract further in 1988 .

In 1987 , favorable growth again characterized computer sales , but with a smaller rate of growth than in the previous year . According to the IHA market study , the number of newly-installed computer units ( all price categories ) fell from about 51,000 to around 46,000 in 1987 . Alone in the last 18 months , the inventories grew up to mid-1987 by 50% to some 185,000 units . Not included in these figures are purely privately-used computers . As the business outlook survey by the Swiss Office Trade Association in the summer of 1987 shows , 52% ( 1986 : 61% ) of those replying expect better sales , 43% classified the prospects as "equivalent" and 5% as "worse" .

Swiss computer sales are made in a continuing keenly contested market , in which signs of saturation are increasing , not only in the [ classical ] sector , and with the medium-sized and large computers . Also at the lower end of the market , with PCs , workstations and small multi-user systems , satisfactory profit margins are generally only achieved in connection with software and service business . With medium-sized and larger systems , a prepared market is present for many applications , although the completely insufficient number of analysts and programmers in Switzerland presents a bottleneck for the realization of projects and therefore also for the sales of hardware . So-called fourth-generation languages which greatly reduce the realization cycles of new applications , are still little used in Switzerland .

The banks again formed the most interesting and largest part of the market . Although they are the most "computerized" companies already , their demand for capacity expansion of central computer complexes and mostly high-value workstations remained substantial . Owing to the already very high degree of integrating bank applications , the demand was largest for all the hardware needed to operate networks . Attractive sales opportunities were provided in the area of "wholesale banking" for electronic trader systems ( the foreign exchange trading , options trading , etc. ) . The course of business was also overall favorable in the public sector . The reduction of working time for Swiss federal employees from 44 hours to 42.5 hours per week contributed to several EDP plans being effected at a faster rate . Industry suffered under continued rationalization pressure , not least due to the strong Swiss franc . The shortage of staff , however , made it difficult for industry to catch up with its partial EDP arrears .

In the first ten months of 1987 , in nominal terms , retail trade sales rose by 1.8% ( in real terms : +1.5% ) . In the case of food , beverages and tobacco , the increase in sales amounted to 0.9% ( in real terms : +0.2% ) and in the case of apparel sales increased by 1% ( in real terms 0.9% ) . The remaining merchandise categories recorded a sales increase of 4% ( in real terms : +5.2% ) . In spite of the stock market turmoil , Christmas trade was generally satisfactory ( exact statistics were not available at the time of going to press ) .

The process of structural change which had been witnessed for years began to slow down . For example , the number of food retail outlets dropped by just 1.3% in 1987 , whereas in the period from 1980 to 1984 they decreased in number at an average annual rate of 3.3% . Since competition nonetheless remained equally stiff , retail traders continued with their rationalization program with an end to improving their competitive strength . For instance , 280 checkout counters at 73 localities have already been equipped with scanner cash registers which can read the data on bar-coded articles , thus bringing about an improvement in commodity control . There are plans to install an estimated 25,000 such scanner cash registers in Switzerland in the longer term . In their endeavors to rationalize payment transactions as well , retail traders are contemplating the introduction of an electronic payment card . When the customer makes a purchase , the amount could then be charged to his or her account straight away and then credited to the trader's account . In an initial step , in 1987 all Swiss retail trade groups ( large retailers and special shops ) joined forces to form the "Electronic Payment System Association" .

Besides their traditional functions such as low-price redistribution and stockbuilding , retail traders were confronted with the fact that customers are expecting more and more of them in the way of convenience , i.e. they require products to be guaranteed fresh , more services to be provided , the range of goods on offer to be extended and shop interiors to be of a more attractive design .

As a result of the stock market crash and the general economic contraction , a mood of uncertainty will influence the development of sales in 1988 . The anticipated slowing down of the growth of consumption is likely to have some adverse effects on the retail trade , with luxuries and spending on consumer durables being affected most .

The member firms of the Association of Swiss Mail Order Businesses ( VSV ) again recorded a good business year . In spite of the generally harsher climate in the retail trade , the share of mail order business in Swiss retail trade could be increased to 2.5% . The idea of profiting from a very wide range of products and being able to make your selections in the peace of your own home is apparently also being used more and more by city inhabitants as a welcome alternative to the hustle and bustle of shopping . This trend is also reflected in the fact that sales turnovers are still on the increase . At approximately 5% , sales growth again proved satisfactory and even topped that of the entire Swiss retail trade . Nonetheless , the previous year's growth rates were not equaled . This was not least due to the adverse effects that the warm and mild autumn had on the sales volume in the clothing sector , which accounts for a considerable share of sales made in the mail order business . The increasing acceptance and the growing success of the mail order business are based on the constant endeavors of Association members to keep the range of products on offer update and perfect in quality . According to the results of a market research investigation , what customers appreciate most are the wide choice , the saving of time and also the possibility of comparing prices at a glance . The quality monogram common to all members is a clear indication to customers that the individual mail order firm displaying it belongs to the Association and is therefore bound by a code of honor to a serious conduct of business , in particular regarding advertising , customer loans and the right to return or exchange goods .

Thanks to specific efforts geared to quality , a favorable price- performance ratio and an update product range , the member firms of the Association of Swiss Mail Order Businesses ( VSV ) anticipate a gratifying business year in 1988 .

At Fr. ?780 million , sales in the photographic trade measured up to the previous-year levels . Approximately Fr. ?275 million of this amount came from the sale of cameras , lenses , projectors and related equipment , Fr. ?330 million resulted from printing and developing and Fr. ?175 million from the sale of film .

Despite a new automatic focus reflex camera on the market , altogether only 55,000 units were sold , a decline of 11% compared to 1986 . The obvious market saturation in the sector of automatic cameras had its effects on the sales of related equipment . There was some improvement , on the other hand , in sales of easyuse compact cameras with adjustable focus which sold 170,000 units . Total sales in the sector dragged far behind the previous year's level , however , due to a shift in sales emphasis at the expense of higher priced cameras .

Undisturbed by new trends , again small format film was a winner . Sales volume grew by 3% to 11.5 million units , gaining 80% of sales for all types and sizes of film . Silver photography is still on a wave of success , with films of greater sensitivity and speed .

Even with bad summer weather , the number of copies increased by approximately 3% to 320 million , equivalent to 49 copies per inhabitant . Switzerland occupies a leading position worldwide as a population of photographers , at present using 2.5 films per person per year .

In the video sector , a segment of entertainment electronics , photography secured a prominent place for itself . Film making with video cameras experienced a strong upswing at the expense of the traditional super-8-narrow film . Together with the electronic branch , sales of Camcorders and video cameras rose by 35% altogether to approximately 40,000 units .

In view of the saturation tendency in the traditional sectors of photography , 1988 will probably not see any improvement in sales . The growing integration of electronic display storage - soon to be introduced in still photography as well - gives reason for hope that some change is in sight . The 1988 Photokina Fair in Cologne may display some new products in this connection .

Sales on the Swiss consumer electronics market displayed a yearyear increase of just under 5% to approximately Fr. ?1.83 billion . In the slightly expanding video sector , the broader range of camcorders were an attraction on the market amid a general price downtrend . In volume terms , roughly 52,000 units were sold in 1987 compared with 28,000 in the preceding year . Sales of home video recorders held their own , or only registered a slight decline , due to such new features as on-screen display , picturepicture and electronic imagery . The sale of compact disc players ( hi-fi and portable ) rose by just under 6% to 185,000 units . In the hi-fi sector , digital audiotape ( DAT ) recorders made their debut on the market last year . Slender teletubes in color TV sets kept turnover at a steady level , with an estimated 360,000 units being sold compared with 365,000 in 1986 . In the new media sector , the launching of the Natel-C car telephone in September ( 25,000 available connections ) resulted in 8,000 to 10,000 being installed by the end of the year , with sales revenue totaling an estimated Fr. ?50 million .

In 1988 , the consumer electronics industry expects a slight upturn in sales . The video sector will benefit from the Olympic Games in Seoul and Calgary , with home video recorders expected to register higher revenues despite a price downtrend . The emphasis on Super-VHS cassettes in the video camera sector will be more pronounced next year . As a supplement to the CD audio range , a CD video will be introduced by integrating a video signal . Growth impetus on this market will also be generated by added features on the Natel-C car phone .

In the first six months of 1987 there was an increase in demand in both the numismatic and the current coin sectors . However , the loss in value of the US currency caused a decline in demand from the dollar region and led to price falls in Europe , especially in the case of pre-1932 US gold coins . Sales of these coins were also affected by the following newly minted gold coins : Chinese Panda coins , Liberty coins from America , Australian Nuggets , and Britannias from Great Britain . All of these coins are issued in the standard international weights ( in ounces ) or fractions thereof . In the numismatics sector collectors were able to profit from relatively favorable prices . Auctions and coin exchanges were well attended , with more and more collectors buying direct , thus serving as a counterweight to the dealers . Whereas coin trading was previously restricted to selected collections , the organizers of a large number of events have now begun auctioning collections containing mixtures of good and inferior coins . For this reason it is becoming harder and harder to produce reliable price lists , which means that interested customers must themselves acquire the information they require and examine objects very carefully before the auction .

Despite the great number of stamp auctions held , prices in the classical and semi-modern stamp sectors remained stable . This is particularly true of high-quality stamps . The prices fetched for Old Swiss stamps at auctions were frequently above catalog listings . Stamp auctions were dominated by bids from wealthy collectors from Japan , Hong Kong and China , which had a considerable stabilizing effect on prices . Intact envelopes bearing bright-colored and foreign postage-paid marks attracted the particular interest not only of Swiss collectors but of collectors from virtually everywhere . The growing popularity of postal history and of collecting Swiss stamps helped to boost shop trade and exchange business .

The prospects for 1988 are generally promising for all "collectables" , i.e. collector's items in the broadest sense . Since they are easy to transport , stamps are particular favorites .

The turnover of management consultants increased by about 20% , and demand shifted further from industry to the services sector . Especially pronounced were the above-average growth of strategic services and of production systems focussing on modern logistical principles ( e.g. reduction of production time , diminishing of capital tie ) . The growing incidence of corporate functions with EDP offer new work for management consultants , especially with respect to the profitable advice on EDP systems . While in specific consultancy areas and with ambitious responsible clients independent consultancy is dominated by individuals and consultancy firms , in respect of personnel the group of management consultants in corporation consultancy departments of accounting companies increased more strongly . The rising demands of customers , especially multinational companies , in a more complex business climate required peak performance by management consultancy . For the future , the sector sees posibilities of good development , as well as the fact that up to now there has been no internationally important consultancy firm in Switzerland . Since the activity of a management consultant is given freedom of action in corporations , also in fairly large firms , the sector has little difficulty in recruiting qualified personnel . Successful management consultants in relation to employees were increasingly rewarded by shares in their client firms .

In 1988 , presumably weaker economic growth is likely to result in a certain consolidation at the little-qualified management consultancy firms . The overall outlook for the management consultancy sector , however , continues to be assessed as promising .

In line with the generally positive economic trend , auditing and accounting firms again reported strong growth in 1987 , by averaging more than 10% . Incuding legal , tax and management consultancy services , this sector of the economy employs nearly 30,000 persons spread over 6,100 firms and registers annual revenues totaling approximately Fr. ?2.5 billion . The increasing volume of mergers and acquisitions in the industrial and services sector resulted in demand for such special services as business surveys , expert reports and recommendations rising to an above-average extent . A somewhat less volatile trend , but with ongoing pronounced growth , was recorded in the traditional auditing , fiscal and legal consulting service sectors . Owing to greater difficulty in recruiting qualified personnel , business results fell short of their full potential . Consequently , there was a continuation of the trend towards mutual cooperation and mergers between consultancy firms .

Auditing and accounting companies expect an ongoing positive business trend in 1988 . The increasing complexity at all levels of economic activity will continue to have a positive impact on demand for consulting services . However , growth will be mainly restricted by the acute shortage of qualified personnel .

A membership increase of 4% to 3,750 persons in the Swiss Bar Association can be viewed as a sign that a legal career continues to attract younger people . Although the financial position of lawyers in Switzerland can be described as generally good , there are growing signs that the starting phase is somewhat longer before a legal practice becomes financially sound .

The General Meeting of the Swiss Bar Association approved the listing of fields of activity in certain professional registers . The task of registering pertinent data and possibly publishing it in professional registers was assigned to the cantonal bar associations . In this way , persons seeking legal counseling can more easily find out which services the various attorneys offer . The 32 offices for legal services which operate in 16 cantons also serve this purpose .

The Swiss Bar Association was active in the Swiss Association of Legal Data Banks and the Swisslex Swiss Legal Data Bank AG . With the realization of an electronic data bank , the prospects should improve for achieving legal counseling on a more efficient and punctual basis .

The Swiss Bar Association defended the interests of attorneys at the meetings held to form new agreements on the "Swiss banks' code with regard to the exercise of due diligence" . In talks with the Federal Banking Commission and the Swiss Bankers' Association , it was agreed that the disputed special position accorded to bank customers who are represented by attorneys shall continue , albeit in more limited form .

Sales in the EDP services and software sector increased by a total of 20% , with considerable differences from company to company . Standard software ( systems and communication programs , standard applications , tools ) accounted for 50% of sales , consultancy and implementation for a little more than 40% and basic and further training for just under 10% . Slightly less than 40% of the sales revenue was secured by hardware producers and 60% by the service industries and software manufacturers . Users continued to show an interest in the integration of standard software components in comprehensive solutions . Users also began to focus more and more attention on the communications sector , which is dominated by hardware manufacturers . Branches of foreign companies continued to gain in significance , especially in the field of systems and communication software .

The process of concentration in the form of takeovers , mergers and joint marketing companies continued . There was still a marked shortage of qualified personnel and specially trained junior executives , although not only users but also manufacturers and the service industries concentrated a great deal of effort on basic and further training . In Switzerland the proportion of solutions developed by the users themselves was still high by European standards .

The EDP service industries and software manufacturers expect a further favorable sales trend in 1988 . However , after years of uninterrupted growth , the service industries and software manufacturers are beginning to feel the need to increase their net product , enlarge their know-how and improve the engineering , all of which will require substantial investments .

The number of the physicians practicing in Switzerland increased further . The growth , however , was less than in the previous years , as is shown by the membership lists of the Association of Swiss Doctors ( FMH ) , to which 90% of practicing doctors belong . Of the 19,647 members of FMH , just under 50% were in private practice , about 40% worked as assistant or superior physicians ( advanced training ) in hospitals , and only 960 doctors were officials or employees . An increasing number of physicians in private practice , of which 62% were specialists and 38% general practitioners , turned to house visits . The number of female doctors also increased , although most of them worked as assistant physicians .

Switzerland has one of the highest density of doctors in the world , with one physician for every 355 residents ( previous year : 369 ) . This situation guarantees optimum medical care for the population . But this forebodes the problem of an oversupply of physicians which is expected to reach its peak at the beginning of the 1990s . The Association of Swiss Doctors ( FMH ) endeavored to show young physicians how they can find useful and satisfying work outside their activity as doctors in direct contact with patients . There are thus numerous positions open for doctors in various sectors of the economy ( industry , the civil service , insurance , etc. ) .

The physicians as before had to deal with the cost explosion in medical services . The costs increased by 6 1/2 times between 1968 and 1985 ; in 1987 , they are likely to have already reached 7% of GDP . As part of their efforts to combat the rise in costs , the doctors worked with representatives of health insurance funds on new health insurance systems such as the well-known HMO ( Health Maintenance Organisation ) . But final solutions are not yet in sight . The trend to contain costs was shown in the development of physicians' fees . Thus the scales of charges were only partly adjusted for inflation , with purely intellectual services , e.g. consultations , being affected more than technical services such as radiographs .

The increased damage to health resulting from environmental pollution gave physicians cause for growing anxiety . Therefore , the Swiss Organization of Doctors for Environmental Protection was formed in June 1987 . The new association intends to combine all the powers of physicians to pursue a common strategy of health and environmental protection with medical motivation .

Developments on the aluminum market were characterized by a substantial increase in aluminum listings , particularly in the second half of 1987 . To a lesser degree this affected the price of semimanufactures . The more favorable price trend also brought about an improvement in the earnings situation in spite of the fact the some companies were still not working to sufficient capacity and despite export difficulties caused by the high Swiss franc rate .

The domestic consumption of primary aluminum rose slightly by 1% to 168,000 tonnes . Since the total output of the Swiss aluminum industry decreased by 9% to 73,000 tonnes on account of the gradual step-down of production at the Chippis smelting works , metal imports went up by 8% . There was virtually no change in the domestic consumption of secondary aluminum .

Whereas Swiss producers of semimanufactures managed to increase sales by 4% to 165,000 tonnes , the import of semimanufactures remained stable at the previous year's level . Manufacturers of aluminum wire and cable were able to maintain sales at the year-earlier level . The producers of aluminum cans , casing and tubing continued to operate at good capacity levels . As in the previous year , sales of aluminum foil proved satisfactory . Light metal foundries generally recorded a good business year , although trends varied from company to company .

The aluminum industry anticipates only a slight increase in demand in 1988 . Crude metal prices are expected to remain firm in the medium term . Longer term prospects are uncertain due to the complexity of international market developments .

Business in the machinery and equipment industry contracted slightly . The order volume in the first nine months of 1987 reported by the 200 companies surveyed each quarter by the Organization of Swiss Machinery Manufacturers ( VSM ) dropped by 3.8% ( as against the same period the previous year ) to SFr. ?14.1 billion . Due to the weakness of the dollar and the slight flagging of business momentum worldwide , there was a marked decline in demand from abroad in particular . Whereas domestic orders dropped by just 1% , orders from abroad declined by 5.5% . Nonetheless , order backlogs reported at the end of September 1987 by the firms surveyed by the VSM amounted to Fr. ?15.5 billion , which was 1.9% up on the figure registered a year beforehand .

These figures do not take into account the extraordinary success scored by the Swiss textile machine industry at the International Textile Machine Exhibition held in Paris in October and by the Swiss machine tool industry at the European Machine Tool Exhibition in Milan the same month .

Since the order picture continued to look favorable , production again rose slightly . The employment rate remained high . However , the number of unemployed ( 1,692 ) and personnel on short work weeks ( 2,146 ) in the machinery and equipment industry at the end of September was still higher than the year-earlier level ( 1,395 and 305 respectively ) , whereas the number of vacant positions fell from 2,660 to 2,634 . There was still a considerable shortage of qualified labor .

The order backlog at 260 firms surveyed declined slightly , amounting to 7 months at the end of September as against 7.2 months one year previously . Contrary to the general trend , the textile machine industry was the only sector to increase work reserves substantially compared with the previous year . In the first three quarters of 1987 , the sales of 200 firms surveyed rose by 2.7% to Fr. 13.1 billion , whereas in the entire sector exports dropped by ...% to Fr. ?... billion .

In view of the continued weakness of the dollar and the uncertainty as to what repercussions the turmoil on the financial markets will have on investment activity , forecasts for 1988 are guarded . The order volume is expected to continue to decline . Due to sharper competition in the export business , more price concessions will be necessary . Since more and more producers abroad are receiving export subsidies , Swiss manufacturers are expected to be in even less of a position to compete internationally .

The Swiss building trade reported strong activities in the first nine months of 1987 . A survey conducted by the Swiss Builders Association among some 2,600 member firms showed that construction rose by a nominal 5% to Fr. ?9.7 billion during this period . Since construction costs rose by an estimated 2% , the real construction volume gained by about 3% . New building orders and the order backlog also posted an increase . The growing construction volume is also reflected in the industry's labor force , which at roughly 167,500 persons was 6% higher at the end of September 1987 than one year earlier . The increase in the number of construction workers in the various trades amounted to as much as 7% , whereas technical and commercial personnel rose by only 5% . The fact that the increase in the employment of construction personnel was higher than the real increase in the production volume indicates that the building trade was more heavily engaged in performing labor-intensive reconstruction and renovation work than in the previous year .

The growth in construction activity could be traced primarily to the development of the building sector , where production rose by 6% in the first nine months of 1987 . As in the preceding year , the strongest impulses were furnished by industrial and service sector construction , but housing also registered a gain of 2.5% . Given that according to official housing statistics the number of newly built apartment units in communities with a population of more than 5,000 declined by 17.9% to 12,174 during the same period , the total of newly constructed apartments in all communities is unlikely to have matched the previous year's level in the first three quarters of 1987 . The residential construction activity of the building trade , which can be described as still satisfactory overall , should therefore be attributable to a larger extent than before to reconstruction and renovation work . In the civil engineering sector , the construction volume increased by 4% in the period from January through September 1987 , with road construction benefiting most from considerable backlog demand .

The differences in construction activity from region to region were again very pronounced . Related to their order backlog , the Cantons of Fribourg and Basle-City , as well as Uri and the Ticino , reported the largest growth rates as of the end of September 1987 , while the order backlog in the Cantons of Appenzell and Aargau declined .

Members of the industry assess the outlook for 1988 with caution , with a trend towards a contraction projected for the construction volume . Indications for this are furnished by downtrends in new contracts placed by the industrial and commercial construction sector , as well as in regard to new residential building . The growth rate in the industrial-commercial sector is likely to ease further in l988 and the building volume of newly constructed apartment units is anticipated to reach the previous year's figure at best . Public construction , which in 1987 was supported by a certain measure of backlog demand , is also likely to register lower growth rates again . Construction activitiy as a whole except for reconstruction and renovation work will display only minor growth dynamism .

The 14 building firms with supra-regional operations affiliated in the Swiss Builders Industrial Group ( SBI ) boosted their sales by more than 10% in the first nine months of 1987 . This favorable trend reflects the contract backlog which had risen already towards the end of 1986 , not least owing to heavier order volumes in the segment of national highway construction . Despite higher production , the domestic order backlog at the end of September 1987 topped the year-earlier level by 5% . The new orders primarily concerned the building sector , but various communities and cantons also awarded a greater number of civil engineering contracts in line with their improved financial posture . While the composition of construction contracts continued to shift further away from new construction to reconstruction , renovation , repair and maintenance work , new constructions continued to form the backbone of construction activities .

As a result of the increase in construction , the building industry raised the number of its domestic work force by roughly 6% . Expenditure on construction equipment and machinery rose by 5% in the first nine months of 1987 . However , the new acquisitions served exclusively to meet replacement needs .

In contrast to heavier domestic activities , the construction volume produced abroad by the companies belonging to the SBI continued to narrow .

The construction industry does not foresee any fundamental changes in the market position during 1988 . Owing to the relatively good order situation , the capacity utilization of the Swiss construction firms should be assured at a high level . The operations of the SBI member companies in countries outside of Switzerland are expected to post a further decline .

The ten offices of planners which comprise the Swiss Association of Consulting Engineers and Architects reported levels of business activity that compared favorably with the previous year . The backlog of work increased from 8.5 months at the end of 1986 to 9 months in the third quarter of 1987 . Although there was continued stagnation in business operations abroad after the sharp drop a year earlier , business developed favorably in Switzerland . The main impulse came from the private sector in the form of projects to construct industrial or trade buildings and administration buildings for service institutions . On the other hand , contracts for public construction and engineering projects in general were slightly in decline . Altogether , earnings remained stable and the number of persons employed declined only insignificantly . The medium-term outlook for contracts and earnings was considered generally good , although the prospects for activity abroad were still bleak .

The building economy's unexpected uptrend produced favorable side effects on cement sales . Almost 4.5 million tons of cement were sold , approximately 4.5% more than the previous year , despite an atmosphere that was not uniformly friendly to construction . Demand in French-speaking Switzerland was much stronger than in the German-speaking part of the country . Along these lines , larger cantons in western Switzerland used almost 10% more cement than in the previous year , whereas growth was below 5% in German-speaking cantons which are usually the greatest cement consumers . Almost 60% of the production volume went again to the concrete transport industry . Approximately 20% went to construction firms and about 10% to cement products factories ; various industries purchased the remaining amount . Competition again came from imports , particularly from eastern European countries in need of currency , and products made of concrete substitutes . Greater capacity utilization combined with increased output during the past few years has resulted in higher rates of plant productivity . Despite somewhat lower prices for cement at the beginning of the year , a combination of better productivity and lower energy costs permitted some improvement in the earnings picture . Environmental protection laws increasingly cut into earnings , since at some plants investments were needed and more electricity used for the numerous required filters and fans .

In view of the generally favorable outlook for the construction economy , sales can be expected to match the year-earlier levels in 1988 .

By the end of September 1987 , the sales of bricks were at year-earlier levels , whereas roof tile production had increased by 6% . Losses sustained by the brick industry due to a decline in home construction could be compensated by upswings for industrial and trade buildings and renovation work . Clay roof tiles gained a larger share of the market . In home construction , the use of heavily insulated cavity wall bricks is becoming widespread . Despite stiff competition from abroad , Swiss building materials manufacturers are holding their own .

With investments running into millions of francs , a number of firms have successfully reduced energy consumption over the past years . Tests on fumes which the brick and tile plants have conducted since 1980 have shown that air pollutants can be reduced to legally permissable levels .

Unless some major changes occur in the overall economic situation , the brick , tile and stone industry looks for business stability or possibly a slight decline for sales in 1988 .

The sales of the construction machinery industry increased due to the favorable building trend . According to the quarterly analysis of the Swiss Federal Office for Industry , Trade and Labor ( BIGA ) , incoming orders in the manufacturing area during the 1st half of 1987 exceeded the year-earlier level by 24% and in the trading area by 22% . In this respect , a shift away from civil engineering in favor of general construction could be observed . The traditional civil engineering firms which have transferred to general construction require different ( chiefly smaller ) plant and machinery , which produced new orders for the construction machinery trade . Demand for plant and machinery with microprocessors ( e.g. , laser measuring machines , cranes and excavators ) also went up , with mainly those enterprises profiting which offered both hardware and software services . In general , the service sector is becoming an ever more important marketing instrument when effecting sales .

In renovation work , there was a boom both in general construction and in civil engineering : among other things , about 1,000 bridges have to be rebuilt or repaired in the near future . New foreign suppliers of smaller and medium-sized machinery , however , increasingly appeared , which sharpened the competition and increased the pressure on margins .

The volume of trade in value terms for the building materials industry increased by approximately 4% , the main difference to developments over the past three years being the parallel structure of growth in the German-speaking and French-speaking regions of Switzerland . In the central and eastern parts of the country , sales were weaker . Although the price of cement eased off by about 5% , prices remained stable for concrete products and for brick and tile products . Insulating materials and renovation materials increased in price by approximately 3% .

The imports of cement , cement products and plaster products climbed both in volume and value terms . Imports of bricks declined slightly . In general the tendency was towards increasing problems in selling foreign building products and precast elements . The number of persons employed in the building materials trade remained unchanged , partly due to problems connected with the recruiting of personnel .

In view of the tightly competitive situation in the sector , abroad as in Switzerland , a slower rate of growth compared to 1987 is expected for 1988 .

Cheese production was reduced by 2.1% to 85,000 tons in Switzerland during the first eight months of 1987 . The principal reason for this trend was the fact that farmers delivered less milk resulting from smaller cattle herds , as well as unfavorable weather and feeding conditions in some parts of Switzerland . Almost all cheese types were affected by the decline in output . To illustrate , the production of Emmentaler decreased by 2.7% to 38,700 tons and that of Appenzeller by 2.6% to 5,700 tons . Somewhat larger cutbacks were registered by Sbrinz at 3,200 tons ( 3.9% ) and Tilsiter at 5,300 tons ( 4.1% ) , whereas the production volume of Greyerzer at 15,900 tons ( 1.3% ) almost matched the figure for the same 1986 period . Soft cheeses maintained their 1986 production volumes and the other semisoft cheese sorts actually topped the 1986 figure .

Total sales of table cheeses declined in the first eight months by 2.6% to 54,900 tons compared with 1986 . Roughly three fifths of these cheeses were sold abroad and two fifths within Switzerland . In a gratifying trend , domestic sales of these consumer cheeses could be boosted by 5.1% to 22,500 tons . Emmentaler cheese rose by 160 tons to 5,000 tons , Greyerzer by 620 tons to 8,400 tons , Sbrinz by 20 tons to 1,400 tons , Tilsiter by 30 tons to 4,800 tons and Appenzeller by 270 tons to 2,900 tons . This achievement at home deserves special mention as the wide and diversified range of domestic and foreign products provided by the Swiss cheese market has significantly widened in past years . Wholesale selling prices remained unchanged for the five traditional hard and semisoft cheese varieties .

Exports of Emmentaler , Greyerzer , Sbrinz , Appenzeller and Tilsiter on the principal markets suffered from strong competition without exception . As a result , aggregate cheese exports declined in the period under review by 7.3% to 32,300 tons . As before , Emmentaler again headed the list at 23,800 tons , followed by Greyerzer at 4,000 tons , Appenzeller at 2,900 tons , Sbrinz at 1,300 tons and Tilsiter with an export volume of 300 tons . Sbrinz was the only sort which did not experience a decline in exports .

Considering the sharp competition , the future sales prospects for Swiss cheese must be viewed cautiously . A further factor is that the firm Swiss franc - and it is likely to remain so - is narrowing the scope for improvement as far as volume and prices are concerned . In the case of hard cheeses , domestic market prospects appear to be somewhat more favorable . However , there have been exceptional developments in the soft cheese sector . Since the middle of November 12987 , soft cheese sales have been suffering considerable losses due to the occurrence of harmful listeriosis bacteria in the Vacherin Mont d'Or dessert cheese . Although investigations have shown that only relatively few other Swiss cheeses represent a similar health risk to consumers , sales of soft and semisoft cheeses in general have dropped considerably . Sales are expected to decline severely in 1988 , as a result of which the earnings situation will grow worse .

The first eight months of 1987 were marked by a pronounced rise in output by the Swiss chocolate industry . Total sales of the companies which are members of the trade association rose by 9.1% in terms of volume and by 1.7% by value .

A survey of customers favorable to chocolate products indicated that the domestic sales of the Swiss chocolate manufacturers rose by 4% to 37,800 tons . But since the volume of exports grew still more strongly during the same period , the proportion of domestic sales to total sales declined to 69% . Above-average high growth rates were mainly achieved by filled chocolate bars , small delicacies such as tiny chocolate bars and lunch bars as well as chocolate confectionery in the form of candy . The rise in sales , however , of these products had to be fought for amid aggressive competition from abroad . In fact , the imports of chocolate products rose in volume terms by 16% in the first eight months of 1987 , so that their share of domestic consumption went up further .

While the volume of sales expanded substantially in Belgium , the Federal Republic of Germany , France and Spain , the rise of sales in the U.S.A. was greatly impeded by the weak exchange rate of the dollar so that the volume of business in this important export market only expanded slightly . Total exports by the Swiss chocolate producers rose by 24% in volume terms to 16,200 tons and by 2% in value terms to about Fr. 125 million .

The sector's earnings position improved somewhat thanks to the overall stable raw material prices and the low inflation rate in Switzerland . The effects on business of the change to a 41-hour week effective January 1 , 1987 were able to be largely countered by continued modernization of specialized machinery .

The capital expenditures served principally to rationalize production . These efforts will be continued in the coming years . As Swiss chocolate enjoys an excellent reputation because of its high quality in both Switzerland and abroad , the producing companies continue to view their sales outlook with optimism .

The 1986-87 year for wine production ( July 1 to June 30 ) was characterized by a further increase in the consumption of domestic wines . Up from approximately 35% in average years to 40% the previous year , in the latest recorded year domestic wines reached 45% of total wine consumption . On the basis of a 2% increase in total consumption to 313? million liters , the sales of domestic wines grew from 122 to 140? million liters while the consumption of foreign wines declined in proportionate and in absolute terms , dropping from 184 to 173? million liters . White wine consumption increased only slightly from 29% to a 30% share of total wine consumption . Thus the increase in domestic wine consumption can be seen as a displacement of imported red wines through domestic ones and only minimally as the result of reducing excess stocks of white wines .

The problem of over-supply has scarcely been resolved , however , although the reserves of Swiss wines were reduced from 202.8 to 187.3? million liters by mid-1987 . Two-thirds of this decrease was due to inventory reductions for white wines , in part because of down-grading certain stocks , especially white wine from Valais .

The wine harvest of 1987 produced approximately 125? million liters , a drop of 6% below the previous year but still higher than the longstanding average . Climatic factors again played a major role in the grape harvest , with eastern Switzerland and Ticino suffering serious losses . On the other hand , no serious efforts have been made to reduce production , since the limits as established by the federal government were surpassed in the three largest wine growing regions , especially in Canton Geneva by 20% and to a lesser extent in Canton Vaud , not quite 10% , and by 3% in Valais . Thus , government measures to reorganize the Swiss wine market have not yet produced the desired effects , since the annual subsidy to viticulture includes Fr. ?30 to 40 million earmarked for grapes to be used in non-alcholic beverages .

In view of the steadily rising demand for non-alcoholic beverages , the Swiss mineral water and soft drinks industry again expanded capacities . In the first nine months of 1987 , the production of mineral water increased by 6.1% to 252.6 million liters and soft drinks by 4.9% to 322.9 million liters .

As in past years , the importers of mineral water and soft drinks also benefited by the rising demand . Third-quarter figures for 1987 show a volume increase for imports of mineral water of 14.9% to 56,513 tons , and an increase of 16.7% to Fr. ?29.6? million in value terms , whereby France was again the major source . Imports of soft drinks climbed by 6.7% to 43,502 tons in volume terms and by 6.0% to Fr. ?37.9 million in terms of value . As earlier , more than half of imported soft drinks came from Austria , followed by West Germany and Belgium/Luxembourg .

Also exports of mineral water continued to expand rapidly , up 16.6% to 11,870 tons in terms of volume and by 18.0% to Fr. ?3.7? million in value terms . West Germany remained the largest market abroad , receiving approximately four-fifths of Swiss mineral water exports . The export potential for soft drinks has essentially been drained , however , by contrast to mineral water where opportunities seem relatively unlimited . Exports of soft drinks declined by 4.6% to 46,520 tons in volume terms and by 2.7% to Fr. ?37.2? million in value terms . The major markets were Saudi Arabia for Fr. ?15.2? million , U.S.A. for Fr. ?13.8? million and West Germany for Fr. ?6.9? million .

Due to a strongly competitive market , prices for mineral water and soft drinks remained virtually unchanged , while export prices could be raised slightly .

In view of a rising demand on the domestic market and on the major export markets , the outlook for 1988 is fairly optimistic . For the mineral water sector , however , the problem will be to determine whether the capacity of existing sources can be expanded or whether new sources will have to be found . A number of problems will also have to be dealt with concerning the packaging of beverages , since in the near future Switzerland will introduce restrictions which conform to standards of environmental protection .

During the first eight months of 1987 , Swiss cigarette production amounted to 15.5 billion cigarettes , which represents a 0.5 billion or 3.3% increase compared with the year-earlier period . The share of filter cigarettes in total production reached 97.7% . At 10.3 billion cigarettes , domestic sales lagged 0.06 billion or 0.6% behind the 1986 result , while exports increased to more than 5.1 billion cigarettes ( +1.1% ) .

With regard to domestic sales , the market share of American blends increased from 48.4% to 50.1% , whereas the portion of Maryland and "noir" cigarettes eased from 46.7% to 45.2% . The various menthol , Virginia , European Blend and Orient brands only displayed minor fluctuations . The share of reasonably priced cigarettes ( Fr. ?2.30 per pack ) that are manufactured predominantly from domestic tobacco came to 0.7% ( 0.9% ) .

The breakdown of domestic sales by price categories shows the following picture : cigarettes at Fr. ?2.50 per pack : 45.1% ; cigarettes at Fr. ?2.70 per pack : 13.1% ; and cigarettes at Fr. ?2.80 per pack : 34.5% . The products in the remaining 8 price categories accounted for 7.3% of sales .

A change in the market trend is not expected in 1988 . The cigarette industry is countering the stagnating domestic market by increasing its exports and by diversifying into certain areas of the food and beverage sector .

After instances of Swiss publishing houses being sold to German media corporations in previous years , in 1987 a renowned German literary publishing house was taken over by an established Swiss publishing firm . Since the German mark tended to weaken , Swiss publishing houses lost further shares of the important West German book market . On the domestic market , book publishers were still faced with the problem of the advance of electronic media . In this connection a great deal of significance is being attached to the current amendment of legislation on radio and television . Initial steps were taken to set about establishing a Swiss "Reading Foundation" , the purpose of which is to organize specific campaigns aimed at promoting reading - a pressing problem for the book publishing sector and an issue concerning all those interested in books and reading .

Publishing houses in Western Switzerland intensified their advertising of Swiss books abroad . In the spring of 1987 the first "Salon international du Livre et de la Presse" ( International Book and Press Fair ) took place in Geneva . It was a remarkable success with both the public and the media .

Although Swiss book sales were in line with growth in the entire retail trade sector , they failed to keep up with cost increases . Sales prices in autumn 1987 were only slightly higher than the year-earlier level . Most small and medium-sized bookshops ( they outnumber the larger ones ) registered unsatisfactory results , and only the larger companies passed the break-even point .

The traditional bookselling trade continued to be confronted with a growing fragmentation of the market , with more and more businesses in other sectors beginning to include books in their range of products . The simplification of operational procedures only produced minor savings , since booksellers can not dispense with offering their customary services . However , a trade communication network has now been fully established as an aid to processing orders . Reading books is a major leisure occupation , and it is in this respect that the book trade is facing increased competition from compact discs and video cassettes . As a result of the strong trend towards these media and the related equipment , the popularity of books - either as presents or for personal use - at times paled into insignificance .

In connection with the federal consumer protection initiative launched against resale price maintenance among other things , booksellers' organizations began intensifying the PR campaign which they began the year before . An adoption of this initiative could mark the end of small bookshops and lead to a general impoverishment of the book as a cultural asset .

On a year-to-year basis , total circulation of Swiss newspapers displayed a slight increase . The market for Sunday newspapers was in the focal point of interest during the year , with the "Sonntagszeitung" and the "Neue Sonntagsblatt" providing a new challenge for the best-selling "Sonntags-Blick" . In mid-November , "Quotidiano" , a new daily newspaper , including a Sunday edition , was launched in the Ticino . The biggest increases in circulation were again registered by newspapers popular on a nationwide scale . At the end of September 1987 , advertising volume of daily newspapers exceeded the year-earlier level by roughly 7% . Job ads rose by 13% in real terms , while general commercial advertising posted a 5% gain . The most impressive trend was recorded by color ads , which also encouraged editors to expand the color portion of their respective news sections . Therefore , during the year , capital outlays were effected on color offset printing presses . As color printing will assume greater importance in the future , more pronounced capital spending in this sector can be anticipated .

Newspaper layouts again displayed a further improvement , with the various feature articles and topics being easier to read and select . In 1987 , average daily per-capita newspaper reading time diminished slightly to roughly 20 minutes , although above-average rates were reported in regions with a high percentage of commuters .

The printing and graphics industry reported favorable business throughout the entire year . There was a higher-than-average rate of employment , with capacities almost fully utilized . Growth in output exceeded the average for Swiss industry as a whole for the third year running . Total revenues just fell short of Fr. ?6 billion .

The most gratifying trend was again registered by printed advertising material . Exports displayed a decline , however , especially in the multicolored quality printed matter sector . In fact , the flow of exports to the USA almost came to a standstill owing to the reversal in the exchange rate situation .

Partly higher paper prices and the real increase in wages and salaries due to the shortage of qualified personnel resulted in a jump in production costs . But the keen competition prevented a transfer of the additional costs to prices . Nevertheless , most firms improved their earnings bases . Above-average results were only reported by a few major publishing firms , however . The majority of companies specializing in jobbing printing were no doubt relieved , after deducting ample depreciation , to report a positive result .

Capital spending exceeded Fr. ?500 million , which is the equivalent of more than 8% of sales . Emphasis was placed on replacement and rationalization outlays designed to maintain and improve competitiveness . Only a few firms were able to finance their modernization spending with self-generated funds .

The printing and graphics industry projects a satisfactory business trend for 1988 . Production growth is likely to ease and reflect the development of the overall economy . The continued high level of capital expenditure involves the danger of renewed overcapacities arising . Furthermore , the shortage of qualified personnel will not disappear , as the efforts to expand apprenticeship programs will only bear fruit in a few years time . Prices of printed material are likely to fluctuate only mildly . At the start of 1988 , there will probably be an upturn to offset the general rise in inflation . Next year , paper prices and the renewal of the most important collective labor agreement for the printing and graphics industry represent factors of uncertainty .

The advertising industry again recorded a gratifying business trend . By the autumn of 1987 , the number of advertising pages in the daily newspapers displayed a yearyear increase of roughly 7% . Employment ads rose by approximately 13% and general commercial advertising by 6% . The newly launched Sunday newspapers [ Sonntags-Zeitung ] and [ Sonntagsblatt ] were unable to dislodge the [ Sonntags-Blick ] from its number one position . In fact , the [ Sonntagsblatt ] was forced to withdraw from the market in November 1987 . Furthermore , the magazines [ Magma ] and [ Leader ] were also wound up after accumulating losses . In August , the sale of the third largest publishing group in the German-speaking part of Switzerland to an outside financier surprised the advertising community . Despite this sale , however , Swiss editors were not restricted in their independence . Moreover , there were subsequently no new publications launched on the market .

The excess demand for advertising on television again increased . On German-speaking TV , only 65% of the advertising spots requested went on the air . In 1988 , demand for broadcasting time on TV will be even higher , as only 55% of the desired advertising spots can be granted . Teletext again gained in significance as an advertising medium . Advertising on satellite television is expected to grow in popularity in the coming years . Moreover , local radios also enjoyed greater demand . The average utilization rate of 75% for German-speaking broadcasts shows that local radio is being increasingly recognized as a supplementary electronic medium . In fact , the major stations were booked out months in advance at times .

Cinema advertising underwent very strong growth . This trend is likely to continue in 1988 . The demand for outdoor advertising also continued unabated . The positive trend was strengthened by some novel forms of advertising . Direct advertising by mail , addressed and unaddressed , also enjoyed greater popularity .

Aside from the classic advertising media , such communications instruments as sales promotion , public relations and sponsoring also displayed a positive development . This advertising alternative will be increasingly employed over the next few years .

In 1987 , Swiss timber production diminished from the preceding year's record level of 4.6 million cubic meters to 4.5 million cubic meters . However , this result still exceeded the annual domestic utilization average between 1977 and 1986 amounting to Fr. ?4.2 million cubic meters . The price level for timber displayed a 3% yearyear decline up to the autumn of 1987 . In the case of hardwood , especially top-quality beech assortments , prices remained stable due to the heavy demand , while supply exceeded demand for pulpwood .

Between January and September 1987 , lumber exports rose in volume terms by 8.8% , but only by 4.2% in value terms on a yearyear basis . Imports of pulpwood eased by 32% during the same period .

The health of the Swiss woodlands continued to deteriorate . More than half of the country's trees have been diagnosed as sick . The share of forced utilization went up slightly to 36% during the first 8 months of 1987 . Owing to the additonal labor and administrative difficulties associated with the dying forests , Swiss forestry operations reported a less favorable earnings base . According to a survey by the Swiss Forestry Commission , most firms specializing in forestry operations are sinking into red ink even where they are soundly structured and well managed . Thanks to subsidies on the part of the Swiss Confederation and Cantons , the country's forestry operations can be kept going .

In 1988 , the Swiss Federal Forestry Department anticipates a slight downswing in both the production and price level of timber . As the share of forced utilization will probably display another upturn , no improvement in the earnings picture can be expected .

The Swiss paper and cardboard industry operated for the most part at full capacity during the first nine months of 1987 . The growing pressure from imports and a slight rise in operating costs on the one hand and the downward tendency of the price of paper and cardboard on the other led to some decline in the situation for earnings .

The production of paper , cardboard and raw materials for corrugated cardboard increased by 4% to a record level of 1,130,000 tons . New record levels were also set in foreign trade . Imports rose by 11.5% to 650,000 tons . The countries delivering the largest share were again West Germany , the Scandanavian countries and Austria . Exports increased by 9.8% to 470,000 tons . Thus the proportion of exports compared to the total production increased to approximately 42% from 39.4% a year earlier . The EC countries and Austria topped the list of countries receiving exports from the Swiss paper and cardboard industry . Because imports increased at a higher rate than exports , the balance of trade deteriorated .

Excluding inventory changes , the domestic use of paper , cardboard and corrugated cardboard materials increased by 5.6% to 1,311,000 tons . This was a slower rate of growth over the previous year's ( +6.9% ) . Switzerland's only cellulose industry raised production by 1.2% to 125,000 tons .

The situation for pulpwood , in oversupply since 1986 , deteriorated further in 1987 , particularly due to storm damage in the spring and the resulting necessity to utilized the diseased trees . The recycling of waste paper grew by 9.5% to 545,000 tons . Consumption of waste paper by industry , however , increased by only 2% to 475,000 tons . On the other hand , a record stand of 44.2% was reached for the portion of waste paper to all crude fiber materials used ( incl. cellulose and wood pulp ) . Thus the paper and cardboard industry is making an important contribution towards the rational use of waste paper .

The Swiss paper and cardboard industry expects some slight slowdown for incoming contracts in the first quarter of 1988 , which will have its effects beforehand on activity .

The flexible packaging industry , which is divided into the three sectors of paper processing , plastic foil processing and compounds , again reported positive business development . Utilization of production capacities at an average rate of about 90% was slightly higher than in the previous year . Mainly because of the stiff competition , with increasing pressure from imports , margins were not satisfactory in all sectors despite the favorable business trend .

The volume of paper processed in 1987 rose by an estimated 3% ; this growth rate was therefore much lower than in the preceding year ( 11.4% ) . Measured by production , imports made up 65% of the total , and exports 31% . Selling prices could be boosted by 1.2% , compared with 0.7% in 1986 .

In plastic processing ( polyethylene ) wholesale prices for household bags , carrier bags and sacks for industrial purposes declined by an average of only 3% from the preceding year's level , after a price fall of about 17% was reported in 1986 due to the steep drop of the oil price . The prices of garbage disposal bags rose slightly by 2% ( previous year : 25% ) .

The compounds sector was distinguished by high operating levels and largely stable , but partly slightly lower prices . In contrast to the production of printed rolls , the output of bags made of compounds was subject to seasonal fluctuations as in the preceding year . The segments of rotogravure printing and flexographics maintained their dominating position in printing processes , while flexographics were used more and more when printing newspapers and forms .

The Swiss flexible packaging industry anticipates a continued overall good course of business in the first quarter of 1988 , but one which is likely to weaken slightly with raw material and selling prices rising somewhat .

In 1987 , the glass container industry increased its sales in terms of value by 3.5 4% , thus recording a higher growth in sales over the 1986 level ( 2% ) . Also the growth of sales in terms of volume at about 4% was strongly higher than that of 1986 ( 1% ) , with mainly domestic sales being brisk while exports rose only slightly . Swiss sales of glass containers to the beverages industry increased , especially to the wine and fruit juice industry . On the other hand , glass sales to the preserved food and pharmaceutical industries declined .

The amount of used glass recycled in Switzerland climbed by about 5% to some 140,000 tons or around 21 kg per capita . The high share of recycled glass amounting to about 75% of glass containers produced in Switzerland led to energy saving of just under 20% in glass melting .

For 1988 , the glass container industry expects largely stagnating sales both in Switzerland and with exports . In the used-glass collection sector , continued growth can to be anticipated in view of the increased environmental consciousness of the population .