Watch Exports to Hong Kong and US Still Weak

RAPAPORT… Swiss watch exports dropped heavily in June as continued slowdowns in Hong Kong and the US outweighed a recovery in China.

Total shipments fell 35% year on year to CHF 1.13 billion ($1.21 billion), the fourth consecutive monthly decline, the Federation of the Swiss Watch Industry reported Tuesday.

“Watch exports continued to fall sharply in June, albeit with some possible hints of the start of the expected recovery,” the organization said, noting that Covid-19 had halted both production and sales for much of the first half of 2020. “As the first country to fall victim to the pandemic, and therefore the first to recover, China saw a very sharp increase in demand for Swiss watches.”

Exports to China jumped 48% to CHF 187.9 million ($200.4 million) for the month. That wasn’t enough to compensate for a 55% slump in orders from Hong Kong, which continues to suffer from a lack of tourists and weak local demand amid a third coronavirus wave. Shipments to the municipality came to CHF 90.1 million ($96.1 million), while supply to the US plunged 57% to CHF 87.4 million ($93.2 million).

Hong Kong and the US are traditionally the two largest export markets for Switzerland’s timepiece industry. However, China has overtaken both, as its domestic retail market rebounded strongly when the coronavirus crisis eased.

Still, the global decline was gentler than in April, when total exports fell 81%, and in May, when the figure was down 68%. Shipments fell 36% to CHF 6.87 billion ($7.32 billion) for the first half of the year.


Image: A watchmaker at work. (Shutterstock)