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Swiss exports edge down in April but bring in more earnings
[ZURICH] Swiss export volumes edged down in April compared with the same month last year but brought in more money as pharmaceuticals makers increased their shipments and prices, offsetting a slide in sales of watches abroad.
Pharmaceuticals shipments rose more than 20 per cent in April, the Swiss customs office said on Tuesday.
Overall, the volume of goods shipped overseas fell 0.6 per cent after factoring out the month's extra working day compared with last year.
But in nominal terms, factoring in price increases and April's extra day, exports rose to 18 billion Swiss francs (S$25.4 billion), up 11.5 per cent compared with last year.
"The short-term development in exports... continued to be driven by pharmaceutical exports, and remained more or less at its above-average level", Credit Suisse economists wrote in a note.
But the performance of non-pharmaceutical exports was less robust, they said.
"Most of this setback can be traced back to particularly weak watch exports."
The export-driven economy has been under pressure since the Swiss National Bank lifted a currency cap against the euro in January 2015, making local products more expensive compared with those of foreign competitors overnight.
The cost issue has been exacerbated by difficulties in target markets, especially for expensive watches.
Watch exports fell by 200 million francs in April, the 10th straight month of decline, as sales in Hong Kong and China continued to slide. Key European markets also experienced double-digit declines, hurt in part by less tourist activity following attacks in Paris.
"The downturn in value was due mainly to watches costing more than 3,000 francs (export price), despite their better showing in the first quarter," the Federation of the Swiss Watch Industry said, of the April numbers.
A dour month for high-end watches saw luxury goods maker Richemont's shares trade down 1.8 per cent by afternoon trading. Shares in Swatch, better known for affordable brands such as Flik Flak or mid-priced Tissot, were little changed.
Chemical and pharmaceutical exports presented a significantly more optimistic picture: in nominal and adjusted terms, the sector was up 24 per cent to 8.3 billion francs in April, driven by a 28 per cent jump in the value of shipments of medicines, vitamins and diagnostics products.
Exports to the single biggest destination for Swiss goods, Germany, rose 20 per cent. "Double-digit growth was posted in the eurozone, especially in Germany, Belgium and Austria," the Swiss customs agency said in its release.