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Monday, July 25, 2011

Swiss Watches Exports Up 19.3% led by Growth in Asia

The entrance to the main watch hall at Baselworld, the world's largest watch and jewelry fair held in Basel, Switzerland.  Photo credit: Anthony DeMarco

The Swiss watch brand is as strong as ever and shows no sign of losing its luster.

Following the recovery of 2010, watch exports in the first half of 2011 showed a year-over-year increase of 19.3 percent to 8.7 billion Swiss francs ($10.8 billion), according to the Federation of the Swiss Watch Industry (FH). Last year’s level was surpassed by more than 1.4 billion francs ($1.7 billion), placing the sector above 2008 export levels.

All of the Swiss watch industry’s main markets recorded a positive trend in the first half of the year. Asia (24.3 percent) increased at a higher rate than Europe (13.3 percent) or America (16.6 percent). It accounted for 54.4 percent of all Swiss watch exports.

Hong Kong was by far the largest market for Swiss watches for the first six months of the year, up 23.6 percent to 1.74 billion Swiss francs ($2.16 billion). The U.S. was the second biggest market up 19.6 percent for the period to 906.3 million Swiss francs ($1.1 billion). China moved up one place in the ranking after recording a 47.8 percent increase in growth (the highest increase across the board) to 715.1 million francs ($890 million). Singapore, South Korea and Thailand also made strong showings between January and June, the FH said. The Middle East also proved very attractive for Swiss watch manufacturers. Japan continued its gradual recovery and ended the half-year on a positive note despite the earthquake in March. In Europe, the positive assessment allowed for different interpretations according to markets. France continued to be influenced by products in transit and therefore recorded growth higher than the world average. Other markets on the Old Continent showed less marked changes.

All months showed double-digit levels of growth for the period. April and May exports rose by more than 30 percent. However, the FH warned that the strong Swiss franc is having a serious impact on margins for watch companies, forcing many to raise prices. However, even with this concern the industry forecasts sustained growth for the second half of the year.

Wristwatches made up the lion’s share of clock and watch industry exports. Their value amounted to 8.1 billion francs ($10 billion) in the first half-year, an increase of 19.6 percent compared to January-June 2010. This growth was supported by a high volume of timepieces. During the first six months of the year, Swiss manufacturers exported 14 million watches, an increase of 2.6 million units (22.5 percent) compared to the same period in 2010.

Gold watches played an important role in terms of growth by value, while in volume terms, steel and the category of other materials did most to underpin the general increase.

All price segments recorded double-digit growth, both in value and volume terms. The 200-500 franc category (export price) registered an increase of more than 30 percent, according to industry figures. Watches costing less than 200 francs accounted for more than 70 percent of exports in volume terms. Timepieces costing more than 3,000 francs showed a flat progression at a high level.

Other watchmaking products exported by Switzerland also recorded increases. Their overall value rose to 561.4 million francs (15.9 percent). Exports of movements saw their value increase by 9.9 percent, while alarm clocks and other clocks lost ground (-46.4 percent).