Switzerland exported half a million fewer watches in November as the economic downturn hit the country's key watch making industry in the first monthly decline since March 2005, data showed on Thursday.
Exports fell 15.3% to 1.52 billion Swiss francs ($1.35 billion) after a 0.1% rise in October.
Shares of leading watchmakers Swatch Group and Richemont fell sharply. Richemont was down 5.1% at 20.48 Swiss francs, while Swatch was off 3.8 percent at 143.20 francs, compared to a 0.5% weaker DJ Stoxx European index of personal and household goods.
“This decline clearly illustrates the curb on growth suffered by the industry as a result of the world economic climate,” the Federation of the Swiss Watch Industry said in a statement, adding November was usually the year's best month.
“Most markets registered double-digit declines,” it said, with falls of 25% in the United States, 17% in Hong Kong, and 14% in Japan, three of the top markets for Swiss watches, while France and Germany still saw increases.
“The US, Hong Kong and Japan figures are a lot worse than reported given a 10% improvement in the dollar year-on-year in November and close to 20% improvement in the yen,” said Kepler Capital Markets analyst Jon Kox.
“Whispers that November data might not be as bad as expected were clearly wrong and we would expect pressure on watchmakers (and branded goods sector) as a result of the data.’
The Swiss federation said exports of wristwatches fell by 15.1% in value terms in November, while 17.4% fewer units left Switzerland in the month, a decline of half a million watches to 2.4 million.
It said all price segments saw declines, with exports of watches worth between 500 and 3,000 francs hardest hit, contracting 30%, while watches costing more than 3,000 francs only fell by 5.4% by value.
Analysts have predicted that 2008 would be the year Swiss watchmakers would suffer their first significant slowdown in half a decade and 2009 would be even worse as the financial crisis spills over into the real economy. (Reuters)