Swiss watch exports rise 9.1 percent in August, driven by China and Japan

Zurich - Swiss watch exports climbed 9.1 percent in August to 1.78 billion Swiss francs, driven mainly by China and Japan, which offset a sharp decline towards the US, the watchmaking federation announced on Thursday.

In August, Swiss watch exports jumped by 22.1 percent to Japan and 15.8 percent to China compared to the same period a year earlier, according to its records.

Conversely, they fell by 19.4 percent to the US, “despite a favourable basis for comparison”, the watchmaking federation stated in a press release.

For several months, watchmaking statistics have been distorted by a base effect from the shock of US customs duties last year. As a precaution, watchmakers had quickly built up stock in the US before they came into effect.

From August, however, watch exports to the US collapsed when the White House imposed 39 percent customs duties on Switzerland until a draft agreement to reduce them to 15 percent was reached in November.

A second distorting effect is the strong growth since December in exports to France, which is used as a platform to export watches to other countries. Over the past month, watch exports there have jumped by 113.5 percent.

The “distorting effects continue to prevail”, commented Jean-Philippe Bertschy, an analyst at Vontobel, in a market note. Exports to the US remain “volatile and weak”, the analyst noted after dissecting the figures. He also expressed caution about the rebound in China in August.

“A single positive month is not enough to establish a sustainable recovery, particularly given the renewed concern about Chinese consumer demand”, he judged.

For several months, these distorting effects have prompted financial analysts to recalculate the statistics to understand the underlying trends.