2004 Half-year exports ‘very good,’ say Swiss watchmakers

Export results for 2004’s first half were “very good” for Swiss watchmakers, says the Federation of the Swiss Watch Industry (FH), representing more than 90% of Swiss watch firms. During those six months, the value of exports of Swiss watches, parts, and clocks was just over five billion Swiss francs (US$3.9 billion), an increase of 10% compared to January-June 2003. “This result virtually makes up for last year’s decline,” says the FH report.

Following a disappointing January, exports began rising again in February. The month of June was especially strong, posting a 26.5% gain worldwide and topping one billion Swiss francs (US$782.9 million) for the first time, a figure usually reached only in a year’s final months.

“The downturn of 2003 is now fading from memory,” said FH president Jean-Daniel Pasche in his address to the FH’s annual general meeting in July in Delémont, Switzerland. “A page is turning: Swiss watch exports are strong [and] economic conditions for a general recovery are increasingly favorable. The United States and Asia are confirming the hopes nurtured at the end of 2003. There is even a risk of overheating in China. In Europe, the recovery is more moderate and will probably take a little longer. Firms seem more confident, particularly after the positive feedback from the watchmaking exhibitions held in April.”

He predicted that growth for 2004 would “be maintained at a rate of several percent, which would see a return to the record figures posted by the industry in 2001-2002.” Pasche remained cautious, however, in his forecasts, aware of the sensitivity of watchmaking products to fluctuating economic conditions and geopolitical events.

If the six-month trend continues for the rest of the year, the full year’s results “would more than wipe out the decline recorded in 2003,” says a report issued by FH. “The United States market is buoyant and should continue on a very positive trend,” it notes, “followed by some Asiatic countries, particularly Japan.” Watch exports to Europe, however, are not expected to show any gains before 2005.

The value of exported finished watches alone during the first half of 2004 was about 4.6 billion Swiss francs (US$3.6 billion), a 10.8% gain. The number of pieces exported was about 12 million, a 7.5% gain or 835,000 more than last year. Gold watch exports increased 8.3% to 1.2 billion Swiss francs (US$939.2 million), and platinum and silver timepieces also recorded rises topping 25%. Steel, the most widely-used material, recorded a “very satisfying” 18%, said the report.

In markets, the United States reinforced its position in 2004’s first half as the leading market for Swiss watch exports, with a total of 837.8 million Swiss francs (US$656.1 million), a 16.3% gain “well above the average,” says the report. Japan, the third largest market, is showing signs of recovery, while the situation in Hong Kong has “changed very markedly” since 2003, with “excellent” gains for May and June, especially.

In Europe, the figures for Italy and France were positive once again, while those for the United Kingdom continued to decline. Other markets recorded increases “more often than not in two digits,” with China especially “at an excellent level,” said the FH report.