SWITZERLAND. In line with forecasts, 2003 turned out to be a mixed year for the Swiss watch industry. Swiss watch exports fell by -4.4% to CHF10.18 billion (US$8.08 billion) last year data showed this week, as the Iraq War and the SARS epidemic in key Asian markets dampened consumer demand for luxury models.
However, the impact of the war and the SARS outbreak on tourism-related sales had not been as great as feared, the Federation of the Swiss Watch Industry (FH) said in a statement.
“Despite these obstacles, the Swiss watch-making industry experienced only a limited downturn to slightly below the level reported in the year 2000, after several years of strong growth,” said the Federation.
The sales value was down CHF462.9 million (US$367.4 million) compared to 2002. Expectations at the beginning of 2003 had suggested that the situation would be even more difficult.
Figures for finished watches were identical to those for the watch-making industry as a whole. The value of exports of these watches was -4.4% lower than in 2002 at a total of CHF9.292 billion (US$ million). The fall in volumes has been less marked since the first half of 2003. However, volume sales were -8.4% lower than in 2002, equivalent to a loss of 2.2 million pieces. The number of timepieces exported therefore reached 24.6 million.
With the exception of platinum, exports of watches in all the different materials were lower. However, exports of platinum watches account for only a few thousand pieces. Among the principal materials, watches in 18 carat gold were significantly lower with a loss of -10.2% in value terms, while steel and bi-metal timepieces respectively lost just -0.4% and -1.6%.
The value of steel watches remained practically stable, but the volume was down by -5.5%. The downturn for aluminium was more significant at -18.2%. Timepieces in 18 carat gold reported better than average performance (-5.8%), but still declined.
The value of exports of other watch-making products and components also fell.
During the year 2003, the fifteen main markets showed the following trend:
US CHF million 1,661.5 +1.1%
Hong Kong CHF million 1,420.2 -8.2%
Japan CHF million 984.9 -10.5%
Italy CHF million 735.1 -9.6%
France CHF million 611.0 -9.0%
UK CHF million 580.4 +3.1%
Germany CHF million 568.3 -9.9%
Singapore CHF million 395.1 -8.9%
Spain CHF million 350.1 +4.4%
UAE CHF million 237.6 -1.6%
China CHF million 197.2 +109.3%
Thailand CHF million 186.2 +3.1%
Taiwan CHF million 183.9 -1.0%
Saudi Arabia CHF million 164.2 -5.7%
Russia CHF million 149.2 +22.8%
Reflecting the economic recovery in the US, exports of watches to this market were +1.1% higher than in 2002. The trend was positive overall, especially because of peaks in March and September, with a downturn at the end of the year; despite this, the final figure for the US market was above zero.
In Asia, Hong Kong, Japan and Singapore ended the year with double-digit downturns in December. Hong Kong has not yet recovered and is still tending to weaken. After a period of relative stability, FH said Japan has reported a more significant downturn since November 2003. On the other hand, China continues to register excellent growth and has gained one place in the ranking of leading watch markets since the first half of 2003.
Confronted with short-term economic difficulties, Europe is now a more difficult market for Swiss watch exports. However, results have been more satisfactory since September 2003. The market seems to have bottomed out in the summer and the trend is now recovering. The year ended with an overall decline of -4.6% in Europe.
“2004 is likely to see a return to moderate exports by the Swiss watch industry,” said the Federation. “The economic upturn in the US should lead Asia in its wake and so create favourable conditions for Swiss watch products. But the European economy will be slower to achieve the same turnaround.”
