Watch exports slip on global uncertainties

Switzerland's famous watch industry was not hit as badly as expected last year Keystone

The value of exports of the Swiss watchmaking industry went down by 4.4 per cent last year but 2003 turned out to be a less difficult year than feared.

The total export value of watches and watch movements was SFr10.177 billion ($8.15 billion) or SFr462.9 million less than in 2002.

According to the Federation of the Swiss Watch Industry in Biel, this year is likely to see a return to “moderate” export growth.

Commenting on the figures published on Tuesday, the Federation said in a statement that expectations at the beginning of 2003 had suggested a rougher ride.

It said the war in Iraq that depressed tourism, the Sars epidemic and the weak economic situation in Europe, had all put a damper on watch exports.

“Limited downturn”

Despite these obstacles, the Swiss watchmaking industry experienced only a “limited downturn” to slightly below the level reported in 2000, after several years of strong growth.

Luxury goods analyst James Amoroso at the Swiss private bank Pictet told swissinfo that publication of the December export figures had put the final piece of jigsaw into the picture.

“The numbers were better than some people were fearing… I think there’s actually generally a feeling of some relief. People won’t see the most recent figures as disappointing,” he commented.

“I think there are some companies in the high-price segment – Richemont and maybe Patek Philippe and Rolex – who will be disappointed that the top end is not motoring away as it has done in recent years,” he added.

Finished watches

The Federation noted that figures for finished watches were almost identical to those for the watchmaking industry as a whole.

The value of these exports was 4.4 per cent lower than in 2002 at SFr9.292 billion. However, the quantity of items exported was 8.4 per cent lower than in 2002, or 2.2 million pieces fewer than in the previous year.

The number of timepieces exported fell as a result to 24.6 million.

Platinum watches were the only area where exports did not fall, but exports of these watches account for only a few thousand pieces.

Exports of watches in 18 carat gold were significantly lower with a loss of 10.2 per cent in value terms, while steel and bimetal lost 0.4 per cent and 1.6 per cent respectively.

While the value of steel watches remained practically stable, their volume was down by 5.5 per cent.

Movements and components

The Federation statement said that movement and component exports were down 4.9 per cent and 4.1 per cent respectively, but watch case exports were more seriously affected and fell by more than 20 per cent.

Reflecting the economic recovery in the United States – the number one market for the industry – exports went up by 1.1 per cent to SFr1.661 billion.

But exports to the number two and three markets – Hong Kong and Japan – were down by 8.2 per cent (SFr1.42 billion) and by 20.5 per cent (SFr985 million) respectively.

The Federation commented that the Hong Kong, Japan and Singapore markets had ended the year with double-digit downturns in December, with the former British crown colony still tending to weaken.

However, it noted that China continued to register “excellent” results, showing growth of almost 110 per cent (SFr197 million).

Asked whether the US was going to be the locomotive pulling other markets behind it to boost the watch industry figures, Amoroso said this was broadly true of any industry.

“The only difference is that the US, which has been performing particularly well in the past few months, is not really a luxury watch market.

“For the whole industry to really recover, we do need to see the Asians, in particular, but also the Europeans, returning to the shops,” he said.

swissinfo, Robert Brookes

In brief

Swiss watchmaking exports fell in value by 4.4% in 2003 to SFr10.177 billion.

The Federation of the Swiss Watch Industry said this was not as bad as had been expected at the beginning of the year.

It added that 2004 was likely to see a return to a moderate growth in exports.