Swiss watch exports start to wind down

Keystone

The value of watch exports took a sharp downturn in November, falling by 15.3 per cent in what is traditionally the best month of the year.

The Federation of the Swiss Watch Industry in Biel reported that the value had fallen to SF1.52 billion ($1.42 billion) from SFr1.79 billion the year before.

In a statement on Thursday, the federation said the decline “clearly illustrates the curb on growth suffered by the industry as a result of the world economic climate”.

Exports of wristwatches fell by 15.1 per cent in value terms, with 500,000 fewer watches leaving Switzerland. The downturn affected all materials with the exception of platinum, it reported.

All price segments showed declines; the downturn was about ten per cent below the SFr200 price point, slightly more than 20 per cent between SFr200 and SFr500, and about 30 per cent for watches costing between SFr500 and SFr3,000.

Wristwatches costing more than SFr3,000 also posted a reduction, though not as steep at -5.4 per cent by value.

“Whispers that November data might not be as bad as expected were clearly wrong and we would expect pressure on watchmakers [and the branded goods sector] as a result of the data,” commented analyst Jon Cox at Kepler Capital Markets.

Total exports

In a related development, total exports from Switzerland fell by 11.3 per cent in real terms in November to SFr16.61 billion. Imports were also down to SFr14.46 billion. Overall Switzerland ran a trade surplus of SFr2.15 billion.

In a statement on the figures, the Federal Customs Office noted that there were two working days fewer than in November 2007.

Analyst Fabian Heller at Switzerland’s second-largest bank, Credit Suisse, commented that the figures were “just not good”.

“The downturn is continuing though the absolute level of exports and imports is still high… All industries are seeing fading demand.”

“However, net exports could still support growth as imports are weakening even stronger,” he added.

David Marmet at the Zurich Cantonal Bank said that Switzerland’s trade balance was “still strong”.

“Big trouble”

“Our trading partners are in big trouble, though Switzerland has been some sort of an island of happiness until recently. Now we see the downturn across the board.”

“Switzerland is closely tied to the fortunes abroad. But the economy is healthy and there is hope that it can recover quickly.”

He said the bank was forecasting a 0.3 per cent decline in the economy for 2009, which looked “realistic though the risks have risen”.

In other economic news on Thursday, the Federal Statistics Office came out with figures showing that Swiss retail sales rose 2.9 per cent in October compared with the same month last year.

In the first ten months of the year, retail sales were 3.3 per cent higher in real terms than in the comparable period in 2007.

“It is surprising how well Swiss consumers are holding up. The low unemployment is supporting spending. But this will change in the coming months,” commented analyst Alessandro Bee at Bank Sarasin.

He added that fading foreign demand was “hitting hard” but Switzerland would survive the recession better than other countries because consumption was supporting the economy.

“We are less pessimistic for Switzerland than for the euro zone.”

swissinfo with agencies

Exports

November 2008

Imports: SFr14.46 billion
Exports: SFr16.61 billion
Balance: SFr2.15 billion

October 2008

Imports: SFr16.34 billion
Exports: SFr18.3 billion
Balance: SFr1.95 billion

Retail sales

The Federal Statistics Office statement said the strongest rise in nominal terms was recorded for food.

Sales of healthcare and beauty products were up by 5.5% and spending on household goods was 4.8% higher.

Only the sales of personal accessories and for culture were down, by 10.2% and 1.3% respectively.