Following a good end to 2002, Swiss watch exports fell 6.6% to 4.56 billion Swiss francs (CHF) during the first six months of 2003, says the Federation of the Swiss Watch Industry (FH) in a July 28 report. It blames the drop on “the effect of the war in Iraq, the SARS epidemic, and the poor economic situation in Europe, factors that take several months to impact on export figures.” And, in fact, the drop was “steeper” in May and June.
“In view of the world economic situation,” the report continues, “a return to growth is not foreseeable in the immediate future.” Though the SARS problem has ended in Asia, “Europe will certainly have to be patient longer before any improvement sets in,” the FH report says. “The watch industry could then follow the positive trend.”
Products. In specific categories, exported finished watches fell 6.9% in value, compared to the first half-year of 2002, to CHF4.12 billion. In volume, the decline was “even more pronounced,” says the FH, to 11.14 million units, a 13.3% drop.
All materials except platinum watches registered a decline, both in value and volume. Steel watches—the largest number—saw their value fall 6.2% and volume decline 9.6% (more than 500,000 units), while 18k gold watches fell 7.2%. These two important materials accounted for two-thirds of the decline. While platinum timepieces did rise during the six months, “these do not feature significantly in the total,” says the report.
“Other products exported by Swiss watchmakers also performed badly overall compared to the first half-year of 2002,” says the Federation report. Though the value of exported complete movements increased slightly (+0.8% to CHF67.1 million), cases, dials, hands, and bracelets all registered varying double-digit declines. High-volume products saw their value fall 10.2%.
Markets. On the plus side, Swiss watch exports to the United States increased 1.2% in value in the first half-year of 2003 to CHF720.9 million, (despite an 11% drop in June), and those to Great Britain were up 10.3%, to CHF259.9 million. All others in Switzerland’s top 10 export markets showed declines. Hong Kong and Japan, second and third, dropped 3.2% (to CHF692 million) and 9.1% (to CHF452.6 million), respectively.
In Europe, results for Italy, France, and Germany “worsened as a result of the gloomy economic situation prevailing [there],” said the FH report. In Asia, Swiss watch exports to Thailand (the 11th largest market) rose 3.8% (CHF93.3 million), China posted an impressive 141.4% increase (CHF85.1 million) and Taiwan gained 3.8% (CHF84.8 million).