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Watchmakers call time on slump

Watchmakers are also keeping a close eye on the economy Keystone

Switzerland’s watch industry is showing signs of recovery after being in decline for much of last year.

This content was published on December 22, 2003 - 15:05

The Federation of the Swiss Watch Industry said the slump in sales during the first half of 2003 had slowed down significantly.

Jean-Daniel Pasche, president of the federation, said the drop in watch exports stabilised at around four per cent in September - a big improvement on the seven per cent figure at the end of August.

Total exports for 2003 are expected to reach SFr10 billion ($8 billion) – the same as 2002.

“The year 2003 was very difficult for most Swiss watchmakers. But September’s turnaround should indicate forward growth,” he said.

The industry was hit badly by the United States-led war in Iraq, the Sars pneumonia virus and a weak US dollar.

“About 60 per cent of Swiss watch sales are dependent on the dollar,” said Pasche.

The industry suffered a further blow in April when – at the height of the Sars scare – the Federal Health Office banned staff and visitors from Hong Kong, China, Singapore and Vietnam attending a major watch and jewellery fair in Basel.

The ban affected more than 300 exhibitors and around 2,500 staff from Hong Kong - one of Switzerland biggest export markets for watches - causing a diplomatic row.

Economic recovery

However, the federation is optimistic about the current economic recovery and believes the Swiss watch industry is set to benefit from it.

“Watches depend on the state of the economy and we have received positive signals from the US, China, Hong Kong and Japan, and I am sure Europe will follow suit,” added Pasche.

Switzerland’s watchmakers are keeping a keen eye on developments outside their traditional markets, led by the US, Hong Kong and Japan.

China, India, Russia, Poland, the Czech Republic and Kazakhstan are all seen as offering great potential.

“There are 100 million consumers in China for us, and change is taking place very quickly,” said Jean-Daniel Pasche.

Chinese market

But Pasche does not think that tapping into the Chinese market will be easy. He expects many obstacles to be presented by the country’s bureaucracy, as in Russia.

“In Russia, our business is hampered by bureaucracy and customs duty. I am sure that once Russia has joined the World Trade Organization (WTO) it will solve our problems.”

The federation also believes the reputation of Swiss watchmakers has not been seriously damaged by allegations of major crimes, including forgery, being committed at the heart of the industry.

Police raided two firms in October in the sector’s heartland in the west of the country, arresting around a dozen people.

They included Jean-Pierre Jaquet, head of the watch movements manufacturer, Jaquet, who was arrested on suspicion of robbery, handling stolen goods and forgery.

swissinfo with agencies

Key facts

Total Swiss watch exports were worth some SFr10 billion in 2002.
Despite the decline in the first half of 2003 the Federation of the Swiss Watch Industry expects exports to reach a similar amount this year.
The US, Hong Kong and Japan were the top three destinations for Swiss watches in 2002.
Watches accounted for some 7.5 per cent of Switzerland’s total exports in 2002.

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