Market Report: Swiss watch exports in 2012

Marked increase in total value and slight fall in the number of watches exported

According to the Federation of the Swiss Watch Industry FH, the Swiss watch industry recorded another vintage year in 2012 following its excellent showing in 2011. The value of watch exports rose to 21.4 billion francs last year. This represents an increase of 2.1 billion francs, or +10.9%.

The very strong growth of 2011, being unsustainable in the long term, gave rise to a uniform and welcome slowdown in the summer of 2012. While most monthly results were very dynamic, a number of more moderate variations held back growth in the second part of the year. This resulted in a below-average increase in November (+4.7%), while September (-1.4%) and December (-5.6%) recorded downturns. However these one-off fluctuations did not prevent the industry from ending the financial year with a remarkable increase.

In an often unfavorable economic climate the Swiss watch industry clearly managed to hold its own, while other export sectors unfortunately experienced more difficulties. The foundations of watch industry growth are strong and offer encouraging development prospects. Widespread investment to develop production in Switzerland is intended to meet growing demand and the sales potential of a number of still emerging markets. From this perspective, the year 2013 shows promise and should see watch exports continue to rise.

Products

Watch industry exports were comprised mainly of wristwatches. The latter recorded a value of 20.2 billion francs, an increase of 11.5% compared to 2011. The corresponding number of timepieces for its part fell slightly to 29.1 million units (-2.2%). However this level remains well above the average of recent years, situated at around 25 million timepieces. The increase in the average price to 693 francs is due mainly to the ever-larger share of the most expensive watches.

Gold timepieces (+20.5%) contributed greatly to the increase in value. The other main materials, namely steel (+8.2%) and bimetallic (+5.3%) recorded a significant but more moderate increase. In terms of the number of timepieces, upturns in several important materials such as steel, gold and bimetallic failed to compensate for the decline in the categories of other materials (-4.5%) and other metals (-7.9%). In the final analysis, Switzerland exported 640,000 fewer watches than in 2011.

Timepieces costing less than 200 francs (export price), which accounted for 68% of total volumes, showed a negative trend in terms of the number of timepieces (-5.9%), while their value remained stable. Other price segments were more buoyant. Between 200 and 500 francs, the number of timepieces increased by 9.3%. The 500-3,000 francs range slightly exceeded its 2011 level: +0.3% by value. Watches costing more than 3,000 francs stood out by their very strong growth. Their value increased by 18.0% and the number of timepieces by 13.1%.

The value of other products exported by Swiss watch manufacturers totalled 1.2 billion francs, an increase of 2.0% compared to 2011. Among these products, watch movements posted a value of 223.4 million francs (+1.2%), with alarm clocks and other clocks recording a value of 50.3 million francs (+27.5%).

Markets

During the year 2012, the fifteen main markets showed the following trend (total value in million francs and % variation by comparison with 2011):

         * UAE figures are inclusive of the re-export watches to other Arab Countries

The main markets for Swiss watch exports showed a positive trend in 2012, with the exception of Singapore, where the decline was however modest (-1.9%). The leading market, Hong Kong, saw growth fall from more than 30% to 6.8% over twelve months, but finished with a particularly high value. China, in third place, recorded an even more spectacular slowdown, dropping from an increase of 50% to virtually zero growth at the end of 2012. These changes reflected a cooling of consumer demand in China, due in particular to political factors. The Chinese however remained important clients for the Swiss watch industry, particularly tourists on their travels abroad. In second place, the United States also lost ground, albeit in a much less marked fashion, ending the year with an increase close to the global average (+10.1%). Europe bounced back strongly from the spring, even though not all markets contributed to the same degree. After a major slowdown, France recorded virtually zero growth from the spring and ended the year with a variation of +1.3%. Germany's performance was in stark contrast however and improved steadily, ending the year with an increase of +33.1%. Italy also picked up the pace, albeit later and to a more modest extent, to end the year with an upturn of +16.0%. Other markets in Europe and the Middle East all recorded strong increases in value terms compared to 2011.

Note:

All the figures released by FH refer to exports data and not to sales to end-consumers. Differences between these two types of data may therefore exist. These data must be regarded as consolidated figures gathering export results from all Swiss watch companies. They obviously cannot reflect the individual results of one particular company or group of companies, knowing that business activity may greatly vary from one to another.