The closure of shops caused by the spread of the coronavirus worldwide will cost Swiss watch firms dear, but exports are expected to rebound next year.
“The Swiss watch industry will experience the largest decline in the past 50 years,” says a study published by private bank Vontobel on Wednesday. The projections are based on the assumption that stores will be open again in May or June.
The anticipated 25% drop in exports in 2020 is even “slightly larger than that recorded in 2009 (-22%) during the financial crisis”, said analyst René Weber.
Watch exports are expected to fall by more than 30% in March, following a 9.2% decline in February during which China, the origin of the pandemic, saw a decline of 50% compared with the previous year. For the second quarter of 2020, a 40% drop in the sector’s exports is expected.
Production is also an issue. Watch manufacturers such as Rolex, Audemars Piguet, Patek Philippe, Hublot and Tag Heuer have temporarily closed their production sites. Others like Swatch have resorted to reduced working hours.
Rebound expected
With a possible resumption of activities in May or June, the second half of the year should show an improvement, according to the report.
Currently, stores have started to reopen in China even though the number of customers remains modest. Businesses began closing at the end of January, while in Europe and the US it was in mid-March.
According to the report, the watch industry should bounce back to post an increase of around 15% in 2021, as in 2010 (+22%).
The industry was enjoying good business until the coronavirus restrictions hit it. In 2019, the Swiss watch industry recorded an increase of 2.4% or CHF21.7 billion ($22.5 billion) in its exports.
More
More
Foreign demand remains high for luxury Swiss-made watches
This content was published on
Swiss watch manufacturers exported timepieces worth over CHF21 billion ($21.7 billion) last year – the industry’s third-best result ever.
Should raw milk sales be banned or should consumers decide?
Swiss food regulations do not allow raw milk to be sold for direct consumption. However, a loophole allows 400 raw milk vending machines to do just that.
COP29: Swiss NGOs call for strong financial support
This content was published on
Ahead of COP29, Swiss NGOs call for wealthy nations to pay $1,000 billion a year to help other countries solve climate problems.
Real Swiss wages likely to rise in 2025, says UBS bank
This content was published on
Higher wages and falling inflation are likely to boost Swiss purchasing power, which will be dragged back by rising health premiums.
This content was published on
Switzerland has a new tectonic map at a scale of 1:500,000, containing updates to geometry, distribution and nomenclature of the tectonic units.
This content was published on
Swiss artist Daniel Spoerri, known for his artworks using leftover food with dirty cutlery and crockery, has passed away in Vienna at the age of 94.
Climate change tipped to alter Swiss avalanche patterns by 2100
This content was published on
Climate change is expected to result in fewer avalanches overall in Switzerland but to increase the danger of wet snow avalanches by 2100.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Luxury watches at your fingertips
This content was published on
In an industry where luxury boutiques equate with high-end customer service, the internet was almost a dirty word among Swiss watchmakers.
The $31 million watch and other Swiss price world records
This content was published on
Whatever your view on CHF640 bars of chocolate, Switzerland holds several world records when it comes to expensive goods.
Hunting for the cheapest mechanical watch in Baselworld
This content was published on
The world’s biggest watch fair is where new luxury watches are launched. swissinfo.ch went looking for low-budget alternatives.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.