Global demand for Swiss-made goods surged 3.5% last year as the value of exports reached CHF208.3 billion ($224 billion), beating the previous record set in 2008. The rise in exports was led by pharmaceuticals, chemicals and watches.
By contrast, imports into Switzerland stagnated in 2014 leading to a record annual trade surplus of CHF30 billion, according to the latest statistics from the Federal Customs Administration. The figures arrive with the Swiss export industry bracing itself for the negative impact of the soaring franc this year.
The trade in pharmaceutical and chemical products, which account for CHF85.3 billion or 41% of all Swiss exports, soared 5% last year while watches continued their inexorable rise in sales by 1.9%.
Well over half of all Swiss exports (CHF120.7 billion) went to Europe, recording a growth of 3% last year. Exports to Asia (CHF45.3 billion) showed the same growth.
Improving economic conditions in the United States saw exports to that market soar 10% in 2014 to a record high of CHF25.9 billion.
But exporters will have little reason to toast the positive figures from 2014 after the Swiss National Bank abandoned its defence of the franc on January 15.
Since then, the price of Swiss goods abroad has risen by around 20% with the franc appreciating against the euro and other currencies.
Many exporters have sounded the alarm bell about their immediate prospects while economists have downgraded their forecasts for Swiss economic growth.
The watch industry in particular has been tipped by market research Euromonitor International to be facing a tough year ahead. Declining demand in key markets like Russia, Hong Kong and China had already put a dampener on the Swiss watch industry’s outlook, according to analyst Sulabh Madhwal.
Consumers in some markets have already stocked up on watches in anticipation of rising prices, he wrote in a recent briefing note.
“Owing to rising product prices, demand from distributors across the world is expected to decline. Japanese and American manufacturers are positioned well to challenge the dominance of Swiss manufacturers,” he wrote.