November recorded the highest monthly value of the year for watch exports, and also the most moderate decline. Benefiting from a favorable base effect, the value of 1.4 billion francs represented a variation of -10.6% compared to November 2008. While negative, this rate is a marked improvement on previous months. The trough of the wave appears therefore to have been reached, and may even be receding. Levels remain low however. In eleven months, the sector exported the equivalent of 12 billion francs, a decline of 23.7%.

Gold watches played a very small part in this upturn in value, as was the case for precious metals generally. In contrast, steel recorded a slight decline, which helped push results higher. Bimetallic timepieces even registered an increase. In terms of the number of timepieces exported, the downturn was very moderate, thanks in particular to steel.

Wristwatches costing less than 200 recorded a moderate decline, much less pronounced than in previous months. The 200-500 franc category stood out by steady growth of around 20%, both in value and volume terms. The decline was also moderate in the 500 to 3,000 francs category, which saw a 4.3% downturn in value. The situation for wristwatches costing more than 3,000 francs showed less of an improvement than other segments; their value fell by 17.8% during the month of November.

Of the top 30 markets accounting for 90% of the total value of Swiss watch exports, ten recorded growth in November. This was particularly the case for China, which ranked fifth thanks to a sharp upturn. In the Far East, too, Singapore showed a positive trend. Hong Kong and the United States curbed their decline in relation to previous months. While Italy recorded a limited decline, France and Germany fell back more sharply even though they had fared better since the beginning of the year.

The base effect was again unfavourable for Swiss watch exports, with the trend failing to show any improvement in September. Their value fell by 26.1%, to 1.1 billion francs. The cumulative variation was unchanged in relation to August and indicated -25.9% for the first nine months of the year. This steady decline has reduced the value of watch exports to their 2006 level.

Watches manufactured from precious metals suffered the steepest declines in value terms in September, while the downturn was less marked for bimetallic timepieces. The number of timepieces exported suffered particularly badly, falling by nearly a million units in one month. Steel and the category of other materials had a markedly negative effect on results. Since the beginning of the year, exports have registered a shortfall of 5.1 million watches.

For wristwatches costing less than 200 francs (export price) the number of pieces exported fell by half in September, generating a deficit of 890,000 units. The 200-500 franc segment performed much better, registering a decline of around 4%. Watches between 500 and 3,000 francs recorded an above average performance. Their value fell by 18.2% compared to September 2008. Timepieces costing more than 3,000 francs set the tone, their value falling by 26.0%.

There was little change on the Swiss watch industry’s different markets. Hong Kong and the United States registered rates of decline close to those of previous months. France and Italy showed comparable above-average trends. Germany improved somewhat. Since the beginning of the year the main European markets have shown a stronger resistance to the downswing in demand for Swiss watch exports. China produced the best result, followed closely by Singapore, where the fall in value was 3.3%.

The first half ended with a deterioration of Swiss watch exports. Monthly results had already shown a distinct fall since the beginning of the year and the month of June was down by as much as 31.9% against June 2008.

However, this slowdown only had a limited effect on the cumulative variation since January. After six months, watch exports showed a 26.4% fall, i.e. a relatively constant rate for several months. In the first half, Swiss watch exports were worth the equivalent of 6.1 billion francs, or 2.2 billion less than in 2008.
After five years of strong growth, the industry’s exports slowed and started to decline from the end of 2008. The level is now below the 2006 results. The economic crisis which is affecting the world has generated a widespread fall in demand to which the Swiss watchmaking industry has not been immune. The consequences affect every single segment and more particularly suppliers. While amore favourable base effect does point to an improvement in the second half, the lack of visibility and confidence makes all forecasting difficult.

PRODUCTS

Exports of wristwatches fell steeply in the first half. Their value stood at 5.7 billion francs, i.e. a 26.2% fall against January-June 2008. In parallel, 9.6 million timekeepers left Switzerland; this figure represents a decline of 3 million units (-23.7%). Every single material has been affected, inparticular steel, gold and bimetal watches. In volume terms, steel watches had the most significant impact on the total; this is logical as they account for more than one in two exported timepieces.

Mechanical timekeepers decreased in the same proportions as electronic products. The various price segments proved less homogeneous, but they all reported negative variations during the first half. After holding up well for several months, timepieces worth more than 3000 francs (export price) also reported a distinct fall. In general, wristwatches selling for more than 500 francs experienced the most severe declines. Products worth between 200 and 500 francs were the least affected with a fall restricted to around 10%. Components exported by Switzerland also experienced a steep fall in value. Only alarm clocks and other types of clock showed a positive result (+2,8%), but with a limited influence on the total since their value amounted to 18.1 million francs. On the import side, the main components like cases, bracelets and dials also recorded a fall equivalent to one-quarter of their value, in keeping with the downturn in Swiss business activity.

MARKETS

In the first half of 2009, the fifteen main markets showed the following trend (total value in millionfrancs and % variation by comparison with the first half of 2008):
1. Hong Kong : 1,022.3 -22.2%
2. USA : 673.3 -43.3%
3. France : 471.6 -10.0%
4. Italy : 456.0 -8.4%
5. Japan : 395.1 -29.6%
6. Germany : 376.2 -13.0%
7. Singapore : 266.8 -30.3%
8. China : 253.3 -36.4%
9. United Kingdom : 253.3 -13.7%
10. United Arab Emirates : 224.5 -34.0%
11. Spain : 142.2 -38.8%
12. South Korea : 106.8 +44.1%
13. Taiwan : 102.5 -30.6%
14. Saudi Arabia : 85.0 -28.9%
15. Thailand : 76.8 -44.4%

The most important export market for the Swiss watchmaking industry, Hong Kong, recorded a fall that proved slightly lower than average in the first half. The United States continued to publish negative rates, among the worst in the table. The trend of exports to the main European markets proved more moderate. France, Italy and Germany showed the lowest fall in the first half. The UK followed closely behind because of the GBP’s favourable exchange rate while Spain has been falling heavily for around one year now. In Asia, Japan has been in the red for nearly two years. Other important markets like China, Singapore and the United Arab Emirates reported a fall of more than 30% against the first half of 2008. South Korea stood out as the only positive exception in the table. The value of Swiss watchmaking exports to that country rose by 44.1%, confirming the much faster growth rate achieved in the past twelve months.