Swiss Watch Exports Barely Grow in May as Iran Conflict Weighs
(Bloomberg) — Swiss watch exports barely expanded in May after two months of declines, suggesting the industry is feeling the effects of fallout from the conflict in the Middle East.
Total shipments were up by 0.4% in value terms compared with a year earlier, buoyed by growth in bimetallic models, while declines were recorded in the precious metals and steel segments, the Federation of the Swiss Watch Industry said Thursday. In the first five months of the year, exports are down 3.1%, it added.
As well as stoking inflation and denting consumer sentiment, the US-Israeli war on Iran has disrupted air travel to the Middle East, curbing sales of luxury goods at duty-free stores.
The Gulf region was one of the bright spots last year for Swiss watchmakers, which include the likes of Rolex and Swatch Group AG. Exports there rose to about 2.6 billion Swiss francs ($3.3 billion), with the United Arab Emirates alone accounting for more than half.
In May, exports to the UAE — a key duty-free hub — slumped by 13.5%, the federation said.
What Bloomberg Intelligence Says…
“Cost and margin pressure remains intense in 2026 amid geopolitical uncertainty in the Middle East, adding to the drag from tariffs, foreign currency and higher average gold and precious metals prices.”
— Deborah Aitken, senior industry analyst. Click here for full note.
Watchmakers’ profitability also remains under pressure due to high precious-metal costs and foreign-exchange headwinds. Gold prices more than doubled over the past three years, with the rally underpinned by a sharp acceleration in buying by central banks.
The US and the UK were among the export bright spots in May, posting gains of 12.3% and 24.9% respectively. Shipments to China fell by 21.4%.
“Looking ahead, we see upside risks from easing Middle East tensions supporting European tourist flows as well as a broader improvement in US and European consumer sentiment,” analysts at Citigroup wrote in a note.
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