PARIS – Swiss watches showed a modest recovery in July, as exports rose 1.6 percent year-on-year, the Federation of the Swiss Watch Industry said Tuesday.
Shipments of Swiss timepieces reached 2.2 billion Swiss francs, or $2.56 billion at current exchange rates, in the period. This growth was led by a 1.4 percent increase in value, while the number of units leaving the country remained almost flat.
Although describing July as a “slight improvement,” the organization noted that the cumulative total for the first seven months of the year was down 2.4 percent against last year’s figure, at 15.2 billion francs, or $17.68 billion.
Exports to China and Hong Kong continued to shrink for the sixth month running, respectively falling 32.8 percent and 19.1 percent, as Greater China’s economic downturn continues to weigh on the luxury segment.
But this was offset by demand picking up in the U.S. at 11.3 percent and the 25.6 percent gain of Japan, which leaped to the second place after decades as the fourth largest export market. The country has gained in popularity as a luxury shopping hub in Asia due to a weak yen.
“We do not see an immediate end to these demand woes in China, but expect demand outside of China to remain on a recovery trajectory as we move through easier comps and the current soft patch in global luxury demand,” said Bernstein’s Luca Solca in a research note.
Europe saw solid growth, particularly in France where exports rose 13.7 percent. The Swiss industry body described the global picture in the rest of its top 10 markets as “generally positive but with a few exceptions,” pointing out lackluster figures for Singapore and Germany in July.
Other notable markets in the month included South Korea, Taiwan and Saudi Arabia.
In terms of materials, precious metal and “other materials” timepieces were the strongest contributors to the month’s growth, particularly in value, while steel models shrunk in volume and value, 4 percent and 10.4 percent respectively.
Price-wise, the top and bottom ends of the market fared well, with watches under 200 Swiss francs at export price bouncing back over 13 percent in both value and volume as timepieces priced above 3,000 Swiss francs remained flat in volume while growing 5.4 percent in value, pointing to rising wholesale prices.
The continued strength of the Swiss franc is also a headwind for the industry.
