Switzerland’s Corporate Resilience Is Starting to Crack

Switzerland has long been one of Europe’s strongest corporate economies, but the latest data suggests that even its traditionally resilient business sector is feeling the pressure of a deteriorating European environment. Financial distress among Swiss companies reached 6.8% in 2025, up from 6.2% a year earlier and 3.8% in 2022, marking the fourth consecutive annual increase. The figure remains well below the European average of 9.2%, but the direction of travel is becoming harder to ignore.

The figures come from the latest A&M Distress Alert by Alvarez & Marsal, which examined more than 15,000 companies with annual revenues above €20 million across 33 European and Gulf markets. The analysis combines measures of corporate performance and balance-sheet strength to identify businesses experiencing significant financial pressure. Across Europe, 1,411 companies were classified as distressed in 2025, while financial distress increased in 10 of the 12 sectors examined.

Switzerland remains stronger than its neighbours

The Swiss position still looks comparatively favourable. France recorded a distress rate of 12.4% and Germany 12.1%, both substantially above Switzerland’s 6.8%. At the European level, the deterioration has become broad-based rather than concentrated in a handful of industries, with weaker earnings emerging as the principal driver of corporate distress.

Switzerland’s underlying corporate balance sheets also remain relatively robust. The proportion of companies classified as lacking operating performance declined from 13.7% to 13.0%, while the share lacking balance-sheet robustness fell from 20.5% to 19.9%. Across Europe, the corresponding figures were considerably higher, at 14.9% and 28.4%. This suggests that the rise in Swiss distress is not yet a broad-based deterioration across the entire corporate sector, but is instead increasingly concentrated among companies facing specific structural or market pressures.

That distinction matters. Switzerland has more room than many European economies to absorb a downturn because its companies generally enter periods of uncertainty with stronger balance sheets and more conservative financing structures. But resilience can delay the effects of an external shock rather than eliminate them.

Exporters are facing a difficult combination

One of the biggest pressure points is the Swiss franc. The currency’s strength has become a persistent problem for companies whose revenues depend on international markets. A stronger franc makes Swiss products more expensive abroad and reduces the value of foreign revenues when they are converted back into the domestic currency, putting additional pressure on already constrained margins.

This vulnerability is particularly important because Switzerland’s economic model is deeply integrated into global trade. Companies can remain financially healthy for some time while absorbing weaker foreign demand, but prolonged pressure on export markets can eventually translate into lower investment, restructuring and job losses.

The broader economic outlook is also becoming less supportive. The KOF Swiss Economic Institute has cut its forecast for Swiss GDP growth in 2026 to 0.8%, from 1.0%, citing the effects of the war in Iran and higher oil prices. The combination of weaker global demand, geopolitical disruption and more expensive energy creates a more difficult environment for manufacturers and exporters.

Automotive and retail are already under strain

The deterioration is particularly visible in several Swiss sectors. Automotive is now the country’s most distressed sector, with 20% of companies classified as financially distressed. Specialised retail follows at 16.7%, while energy and utilities stand at 12.5%.

Energy and utilities recorded the sharpest deterioration, with distress increasing by 12.5 percentage points year on year. Information technology rose by 8.3 percentage points, while manufacturing increased by 6.3 percentage points. Retailers are facing weak consumer demand while relatively low inflation limits their ability to pass higher costs on to customers, leaving less room to protect margins.

The pressures are not limited to companies already classified as distressed. Swiss corporate bankruptcies have also risen sharply. CRIF reported 6,075 corporate bankruptcies between January and May 2026, 58.4% more than during the same period of 2025. Construction, food and drink, and retail were among the sectors particularly affected.

Europe’s wider corporate problem is more serious

Switzerland’s 6.8% distress rate becomes more significant when viewed against the wider European picture. The European corporate distress rate reached 9.2% in 2025, up from 8.3% in 2024 and the highest level recorded in four years. Fashion retail was the most distressed European sector at 14.1%, followed by chemicals at 12% and media, entertainment and related services at 11.7%. Automotive and manufacturing also deteriorated sharply.

The European Central Bank has separately identified rising corporate bankruptcies across the euro area, although aggregate bank asset quality for corporate lending has remained broadly stable. The divergence indicates that higher insolvencies have not yet translated into a comparable deterioration in banks’ overall corporate loan books.

The concern is what happens if corporate distress continues to spread. The A&M analysis covers financial data through 2025, meaning some of the pressures that emerged later have not yet been fully incorporated into the figures. A&M expects corporate distress to increase further over the following 18 to 24 months as companies deal with weaker earnings, energy costs, supply-chain disruptions and limited financial headroom.

Switzerland’s advantage may become a buffer, not a shield

For Switzerland, the immediate story is therefore not one of systemic corporate weakness. Its companies remain considerably more resilient than their European counterparts, and several balance-sheet indicators have actually improved. The more important development is that the country has now experienced four consecutive years of rising financial distress.

That makes the Swiss economy an important indicator of how Europe’s corporate pressures are evolving. If companies with comparatively strong balance sheets are increasingly being pushed into distress, weaker firms elsewhere in Europe may have even less capacity to absorb another deterioration in demand, energy prices or financing conditions.