The Federation of the Swiss Watch Industry has announced that Swiss watch exports fell in August.
The bad news means that Swiss watch exports could be heading for their first annual decline in six years, with some industry analysts pointing to the Apple Watch effect as a key reason behind it.
Shipments declined 1.6% to 1.47 billion francs (approximately £1 billion), the federation announced on Tuesday. Exports of watches with wholesale prices less than 200 francs fell 13%, while the 200-franc to 500-franc segment plunged 24%.
So large is the export of timepieces from Switzerland that watch shipments make up about a tenth of Switzerland’s total exports. The fact that these exports have declined 1.2% in the first eight months of 2015 is a worrying sign for both the already troubled Swiss economy and the wider global watch industry.
As well as Apple’s foray into the watch market, there are other potential reasons for the decline in Swiss exports. The Swiss government’s decision to scrap the Swiss franc’s long-standing cap against the Euro at the start of the year shocked markets globally and, overnight, made Swiss products a lot less competitive on the world stage.
Another reason could be the Chinese government’s decision to devalue the yuan last month, a move that made Chinese exports cheaper on world markets but made imports (such as Swiss watches) more expensive for Chinese citizens. The evidence suggests that this has been a major factor, with shipments from Switzerland to China down by 39%.
Both Swatch Group’s and Richemont’s shares fell in the aftermath of the Federation of the Swiss Watch Industry’s announcement.