Record Swiss exports despite drooping watch sales

Watch exports were down 10% on the previous year Reuters

Swiss exports rose to record levels last year as the franc stabilised against other currencies. However, performance differed markedly in specific sectors, with increasingly expensive pharmaceuticals and chemicals propping up disappointing watch and machinery sales.

The value of exports gained 3.8% on 2015 to reach CHF210.7 billion ($210.6 billion), according to the Federal Customs Administration. Imports also grew, but the trade surplus also notched a record of CHF37.5 billion.

This compared to a -2.6% decline on Swiss exports in 2015 – the year the franc experienced massive volatility as it cut loose from the euro.

Pharma and chemicals firms were again by far the most successful exporters last year, shipping out products worth more than CHF94 billion. This increase was achieved more by price increases than by volumes of materials exported.

But sales of machinery and electronics products flatlined in 2016 and watches performed even worse – down 10% on the previous year. The Swiss watch industry is currently experiencing a major reversal from the boom years of 2010-2014 when exports rose 40%. Already in 2015, exports shrank 3.3%.

This has been put down to a corruption crackdown in China, which outlawed the gifting of expensive presents like Swiss watches to officials, a dampening of economic growth, particularly in Asia, Brexit uncertainties and the Russian trade embargo.

Jean-Daniel Pasche, president of the Swiss Watch Federation, tried to put a brave face on the disappointing figures, saying exports were still up on the benchmark year of 2008 when the financial crash was about to bring down markets. “Certainly, nobody is pleased by the situation, but it is far from a disaster,” he said.

However, workers might feel less secure, having seen their numbers drop between 1,500 and 2,000 last year, representing 3-4% of the industry’s workforce.