Swiss Watch Exports Up 6.7% in 2008, Despite Late Decline

Swiss watch exports managed to have another record year in 2008, despite a sharp decline in the last four months due to the global recession, says a new report by the Federation of the Swiss Watch Industry (FH). That decline is continuing this year, it says. (A final report will be issued March.)

Watch exports increased 6.7 percent in value (export price) to 17 billion Swiss francs (almost $14.6 billion), the fifth year they’ve topped prior year results. In terms of units, however, total exports barely finished ahead of 2007, increasing just 0.8 percent to 26.2 million watches (a gain of only 210,000 units).

“Overall, 2008 was a very good year for Swiss watchmaking,” says the report, with “high rates of monthly growth” for the first eight months—although that rate of growth declined steadily after April, due to the “unsettled” world economy.

The deepening global recession—especially in the United States—hit home in September, when the “sudden and very marked downturn in the economic situation impacted significantly on watch industry performance,” the FH said. As a result, 2008’s fourth quarter exports dropped 7.8 percent, with November—normally the best month—showing the steepest fall (down 15.4 percent).

The FH says the slide continued, with the first months of 2009 in the red.

For the year, watches costing under 200 francs (about $172, export price) showed gains in value and units exported. However, results for those between 200 and 3,000 Swiss francs (about $172 to $1,533) were below 2007 (especially those between $430 and $1,533). Demand remained “very high,” says the FH report, for timepieces costing more than 3,000 Swiss francs each (about $1,533), with just under 20 percent growth. During 2008’s fourth quarter, all price segments declined, except those over 3000 Swiss francs.

Most major markets for Swiss watches increased their 2008 imports, with China topping the list, with a 43 percent gain in value, to $708.6 million. However, three didn’t.

United States’ imports of Swiss watches fell three percent (to just over $2 billion), despite summer-time gains. Japan was “negative throughout 2008,” says the FH report, falling 4.5 percent. The United Kingdom had a 2.7 percent drop.

Generally the pace in Europe slowed, resulting in an overall increase of 3.6 percent. Markets in the Middle and Far East recorded significant increases, with Asia showing the most growth in Swiss watch exports, up 13.2 percent.