Swiss watch exports suffer first monthly decline in two years
SWISS watch exports declined slightly in July, the first monthly drop in more than two years, raising concerns that demand for pricey timepieces is beginning to slow amid higher prices and economic pressures.
Shipments fell by 0.9 per cent last month to 2.2 billion Swiss francs (S$3.4 billion) with China driving the downturn, the Federation of the Swiss Watch Industry said on Tuesday (Aug 22).
Exports to China, the second biggest market behind the US, fell 16.6 per cent following a surge last year. Singapore, another key market, suffered a 7.9 per cent drop compared to a strong rise a year ago.
The decline, driven by lower exports to the two key Asian markets, suggests booming demand for expensive Swiss timepieces may be starting to cool after climbing to a record above 24 billion francs in 2022. Brands from Omega to Patek Philippe and Rolex have raised prices to offset higher input costs, boosting sales and profits amid the upswing.
Zuercher Kantonalbank analyst Patrik Schwendimann said the monthly drop in exports was unexpected and could negatively impact shares of Richemont and Swatch Group.
“However, as usual, a single month of watch exports should not be overestimated, as it is not a sales figure,” he said, predicting export growth to return in August and September.
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The last time Swiss watch exports suffered a monthly drop was in December 2021.
The federation said the slight downturn “will not have a significant impact on the general trend or forecasts for 2023”, suggesting the industry could still hit a record again this year.
Exports declined across all price segments with the exception of watches priced above 3,000 francs, which gained 2.2 per cent by value.
SEE ALSO
Shipments to the US, which overtook China as the biggest market in 2021, increased by 5.2 per cent in July, indicating demand is still growing in the largest market for Swiss timepieces.
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