UK defies overall Swiss watch export value decline

Figures relating to the value of Swiss watch exports for June 2013 have revealed an annual decline of 3.1%, with gold watches recording a double-digit drop. However, the UK faired well with its Swiss watch imports for June totalling CHF85.2 million (£59.3m), up 15.2% on 2013.

The latest figures from the Federation of the Swiss Watch Industry (FH) showed that in June, Swiss watch industry exports, were worth CHF1.9 billion (£1.3bn), which was a 3.1% drop on the results for June 2012. However, despite the year-on-year decline, the FH said that the results were close to those in May this year, even though there had been a distinctly more unfavourable base effect. The FH also highlighted that the reduction is partly due to the fact there was one less working day in the month than in June 2012. In the context of the first half of 2013, watch industry exports reported near-zero growth – up 0.8% to CHF10.2bn (£7.1bn).

A drop in value has been attributed to gold watches in both May and June. For June, gold watches reported a double-digit fall. The value of gold wristwatch exports dropped by 12.9% from June 2012 to CHF617.4m (£429.7m). Steel watches and bimetal pieces countered the gold drop with significant growth. Worth CHF678.5m (£472.3m) in value, steel watches were up by 3.6%. The FH said that steel watches remained stable compared to June 2012. It added: “The total number of timepieces exported was influenced by the categories of other materials and other metals, which were distinctly lower.”

In terms of the price brackets of watches, the FH reported that trends remained similar to those recorded in May. Only models with an export price of between CHF200 (£139) and CHF500 (£348) were found to have achieved growth, which was said to be 20%. Watches below CHF200 (£139) fell by 14.8% in volume terms. Luxury watch exports were fewer with watches priced at more than CHF500 (£348) falling by 3.4%, in value terms.

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The FH said that most of the main markets for the Swiss watchmaking industry reported a decline in June. Hong Kong and the US were found to have experienced an annual fall, compared to June 2012, with the Hong Kong’s Swiss watch imports totalling CHF343.2m (£238.9m), which was down by 15.3% on 2012, while the United States was at CHF189.4m (£131.8m), equaling a drop of 3.1% on the year before. It was a different story for China with its Swiss watch imports at CHF124.4m (£86.6m), a 10.6% climb on 2012. The FH said: “After falling for six months, China benefited from a favourable base effect to show a higher result”.

Meanwhile, although Europe reported its first fall in two years, with a small 0.8% drop, the Swiss watch imports to the UK totalled CHF85.2m (£59.3m), a growth in annual demand of 15.2%, and a growth of 50.1% on 2011. The UK was in 9th position in export value, compared with 29 other countries. Other markets that demonstrated value growth were Bahrain with a 100.1% climb from 2012, Russia was up 56.7% and Belgium recorded a 52% increase.

Separately, the Swiss parliament passed a bill in June confirming that watches will only be able to use the term Swiss made if 60% of the value originates in Switzerland.

A bill has now been passed, which means that the authorities will be able to drive forward plans to strengthen the Swiss-made label in the watch industry.

The “Swissness bill” has been six years in the making, involving numerous discussions and adaptations, and has now finally been passed as law in both parliament houses.

Previously, the watch industry had complied with a 40-year-old directive that said that at least 50% of the value of the watch movement, not including the strap, case, glass and dial, must be Swiss.

Talking about the law, FH president Jean-Daniel Pasche said that the FH has been consistently involved in the ongoing process and that it backs and applauds the decison.

This story originally appeared in the August issue of WatchPro. To view a digital version of the book click here

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