Swiss watch exports dropped 4.4% in overall value in 2003, to almost 10.2 billion Swiss francs (about US$8.2 billion), because of some serious global problems, says a February report by the Federation of the Swiss Watch Industry (FH). Still, says the FH, whose members represent over 90% of all Swiss watch manufacturers (finished products, watch movements, components, etc.), that wasn’t as bad as feared in early 2003.
“Expectations at the beginning of the year suggested the situation would be more difficult,” says the report. “The war in Iraq, which depressed tourism, the SARS epidemic [in Asia], and the weak economic situation in Europe were all factors prejudicial to Swiss watch exports.” Despite those obstacles, however, the downturn in exports for the Swiss watch industry in 2003 was limited.
This year is likely to see a “light increase” in exports, FH president Jean-Daniel Pasche told JCK, largely because of the economic upturn in the United States. That should pull Asia in its wake “and so create favorable conditions for Swiss watch products,” says the report. Europe, however, with its “short-term economic difficulties, is now a more difficult market for Swiss watch exports,” notes the FH.
Products. The value of exported finished watches, specifically, also was 4.4% lower in 2003, totaling 9.29 billion Swiss francs (about US$7.4 billion). The number of exported finished watches dropped 8.4% to 24.6 million units, a loss of 2.2 million. However, the report notes the fall-off in volume became “less marked” in the second half of 2003.
With the exception of platinum—which accounts for only a few thousand pieces—the value of exports of watches made in all materials was lower. Watches in 18k gold showed the most significant drop, down 10.2%, with volume off 5.8%. The value of shipped stainless-steel watches remained relatively stable (down only 0.4%), but the volume shipped fell 5.5%.
The export value of other watchmaking products also fell. Movement and component exports were down 4.9% and 4.1%, respectively. Watch case exports were more seriously affected and fell more than 20%.
One bright spot in 2003 was large horological products (clocks of all kinds and their components), which increased 6.4% in export value.
Markets. For 2003, the United States was the No. 1 market for Swiss watch exports, totaling almost 1.7 billion Swiss francs (about US$1.3 billion) in value, a 1.1% gain over 2002.
Most of the other top 10 Swiss watch markets showed declines in 2003. Hong Kong (No. 2), dropped 8.2% to 1.4 billion francs (about US$1.1 billion); Japan (No. 3), was down 10.5% to almost 985 million Swiss francs (about US$789 million); Italy (No. 4), down 9.6% to 735 million Swiss francs (about US$588 million); and France (No. 5) fell 9% to 611 million Swiss francs (about US$489 million).
Germany (No. 7), Singapore (No. 8), and the United Arab Emirates (No. 10) also posted declines. Only Great Britain (No. 6), with a 3.1% gain to over 580 million Swiss francs (almost US$465 million) and Spain (No. 9), with a 4.4% rise to 350 million Swiss francs (over US$280 million), joined the United States in boosting their imports of Swiss watches.
China (No. 11) showed the largest gain in Swiss watch exports of any market in 2003, increasing 109.3% to over 197 million Swiss francs (almost US$158 million).
Top Swiss Watch Export Markets (2004)
|Millions of francs||% Change from 2003|
|Source: Federation of the Swatch Watch Industry|
|2. Hong Kong||1,420.2||-8.2|
|6. Great Britain||580.4||+3.1%|
|10. United Arab Emirates||237.6||-1.6%|
|14. Saudi Arabia||164.2||-5.7%|