Swiss watchmakers celebrate a vintage year

Swiss watchmakers are cautiously optimistic despite global political and economic uncertainty Keystone

Swiss watch exports grew by 6.3% in 2018, breaking the CHF21 billion ($21.2 billion) mark. This increase, largely due to Asian markets, is set to continue this year despite uncertainty surrounding the Chinese economy. 

Exports to Hong Kong shot up by 19.1% (to CHF3 billion francs) and to China by 11.7% (to CHF1.7 billion). Swiss watchmakers enjoyed vigorous demand from East Asia, which resulted in the second-best annual result ever, according to figures published on Tuesday by the Federation of the Swiss Watch IndustryExternal link (FH). 

Add to that purchases by tourists, and certain experts reckon that every other “Swiss Made” watch sold in the world is bought by a Chinese. 

What’s more, this trend is expected to continue, said FH president Jean-Daniel Pasche. “Despite slower growth and the risks tied to the trade war between the United States and China, the Chinese middle class continues to grow and its attraction to Swiss watches remains intact,” he told swissinfo.ch.

As for 2019, Pasche talks of “cautious optimism”. Watch exports should continue to grow, he says, but the rate depends on several geopolitical factors, including Brexit and the growing power of nationalism and protectionism in many countries. 

Foreign trade

Total Swiss foreign trade set high standards in both directions of trade in 2018, the Federal Customs Administration reported on Tuesday.

Exports grew at their strongest rate (+5.7%) since 2010 in nominal terms and thus reached a new high. The same applied to imports, which grew by 8.6% year on year and thereby exceeded the CHF200 billion ($201 billion) mark. The trade balance showed a surplus of CHF31.3 billion.

This is notably the case in Brazil, where the arrival to power of Jair Bolsonaro is creating significant uncertainty. 

“In this context, it’s essential to anchor free trade in bilateral agreements. We hope that talks with the Mercosur countries [Argentina, Brazil, Paraguay and Uruguay] rapidly conclude with such an agreement,” he said. 

Pasche is pleased with the free-trade agreement signed with Indonesia at the end of 2018. He also welcomes the Swiss government’s willingness to re-open negotiations to agree a similar deal with the United States.

More jobs 

The good health of the Swiss watch industry can also be seen in the number of people who work in the branch. Within one year, almost 3,000 jobs were created in the 700 or so Swiss watchmaking companies, according to estimates given to swissinfo.ch by the industry’s employer associationExternal link. 

“A growth in jobs was expected, but the size surprised us,” admitted Ludovic Voillat, the association’s spokesman. “It’s all the more impressive given that temporary staff aren’t included in our census.”

This growth of almost 4% practically makes up for the job losses recorded between 2015 and 2018. The 57,800 current employees are not far from the record of almost 60,000 seen in 2014, the reference point for Swiss watchmaking since its reorientation towards the luxury sector at the beginning of this century. 

“That shows that watchmakers are confident in the future, despite the uncertainties that are weighing on the global economy,” Voillat said. 

Increasingly qualified, watchmakers aren’t building on the growing automation that has been seen in the sector in recent years, he said. 

“Watchmaking companies need manual savoir-faire more than ever. By hiring permanent workers, they guarantee they will have the necessary skills on site.”

(Translated from French by Thomas Stephens)