Zurich - Swiss watch exports contracted by 2.8 percent in 2024 to 25.9 billion Swiss francs (23 billion pounds) due to a drop of more than 25 percent in China, the Federation of the Swiss Watch Industry announced on Thursday.

After reaching a historic high in 2024, exports continued to decline month after month last year, with the watchmaking federation noting that "the contraction in Swiss watch exports intensified in December." During the last month of the year, they fell by 5.4 percent to 2 billion francs, it said in a press release.

The luxury sector has been hit by a drop in demand in China with slowing economic growth, the real estate crisis and youth unemployment, knocking on to other markets where demand depends partly on Chinese tourists.

Exports to China plummeted by 25.8 percent in 2024 and by 18.7 percent to Hong Kong. In the US, where the recovery in the sector started in 2021 after the shock of the Covid-19 pandemic, they continued to grow, posting a 5 percent increase over one year, according to data from the watchmaking federation. In Europe, they experienced a more contrasting trend, falling by 1.6 percent in the UK and Italy and by 3.8 percent in Germany. On the other hand, they climbed by 2.5 percent in France.

Swiss watchmaker Swatch Group reported sharply lower annual results on Thursday, driven by "the sharp decline in demand for consumer goods in China," it said in a statement.

The group, known for its multi-coloured plastic watches but also owner of around 15 other brands (including Tissot, Longines and Omega), saw its sales drop by 14.6 percent in 2024 due to this drop in demand in China but also a drop in orders for watch components.

In mid-January, luxury giant Richemont surprised the luxury sector with quarterly sales up 10 percent thanks to growth in other markets during the holiday season. But the growth of the group that owns Cartier was driven mainly by jewellery, a segment more resistant to the vagaries of the economic climate. Sales in its watch division fell 8 percent between October and December.(AFP)

This article originally appeared on FashionUnited.FR. It was translated to English using AI and edited by Rachel Douglass.