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Last year Swiss watch exports surpassed CHF24 billion ($26 billion) for the first time. The positive trend is expected to continue into 2023.  Despite the return of inflation, falling stock markets, the collapse of cryptocurrencies and a gloomy outlook for economic growth, watch exports reached a record level in 2022, according to figures published on Tuesday by the Federation of the Swiss Watch Industry. Their export value increased by almost 11.4% compared to 2021, reaching CHF24.8 billion. This growth occurred despite declines in China (-13.6% over one year) and Hong Kong (-10.5%), the second- and third-largest markets for sales of “Swiss made” watches respectively. On the other hand, watch exports rose steadily in 28 of the top 30 markets. This was particularly the case in the US (26.3%), which, like the previous year, occupies top place in this ranking. |
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“Many American consumers have emerged from the Covid crisis with more savings than usual. They have been one of the main drivers of growth, whether by purchasing Swiss watches in their own country or by travelling abroad, particularly in Europe,” says Jean-Philippe Bertschy, a watch expert at Bank Vontobel.
Chinese reboundTop-end timepieces took the lion’s share of the world watch market in 2022: watches worth more than CHF3,000 on export – that is, a final selling price of more than CHF7,500 – accounted for more than three-quarters of the total value of exports. The return of inflation (2.8% in Switzerland and 6.5% in the US in 2022) has so far had little effect on the wallets of the world’s most affluent, who have favoured investing in luxury watches as a way of protecting themselves from falling stock markets and other assets. The positive trend seen over the past two years is expected to continue into 2023. The end of the mass lockdowns imposed by Beijing as part of its “zero Covid” policy and the return of Chinese travellers to the world’s main tourist destinations should benefit Swiss watchmaking companies. Bertschy expects a high level of consolidation in 2023, with an increase in exports of 1%-3%. “China will obviously be in the spotlight and should represent an important vector of growth. On the other hand, we remain more cautious with regard to European markets, particularly Germany, the UK and Italy, which are suffering from brutal inflation in energy prices,” he said. |
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Recruitment difficultiesThe rise in energy costs will represent a major challenge for the Swiss watch industry. The same applies to the costs of important raw materials such as steel and copper, which increased by between 10% and 20% last year. The fact remains that the industry will need more workers in the coming months. Like many other economic sectors, the watchmaking industry is experiencing increasing difficulties in recruitment. Watchmaking companies had to hire 3,000 extra people in 2022 to cope with the increase in demand. The industry’s workforce now exceeds 60,000 employees, a figure not seen since the late 1970s. “Watchmakers are in a way victims of their own success. Such post-Covid growth was difficult to anticipate. This high demand has resulted in an explosion in staffing requirements,” says Ludovic Voillat, secretary general of the Employers’ Association of the Swiss Watch Industry (CIPH). |
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Training offensive
The result is that in the country’s main watchmaking regions, located in the northwestern cantons, the recruitment pool is practically dry. This is the case even on the other side of the border, in neighbouring France, where many employees essential to the smooth running of the industry come from.
While the labour shortage has so far mainly affected certain highly specific technical professions, recruitment difficulties now affect all areas and all levels of qualification.
“Automation is progressing in our industry, but to produce top-of-the-range timepieces, human know-how remains indispensable,” Voillat says.
The CPIH estimates that nearly 4,000 additional professionals will need to be trained and recruited in technical professions alone by 2026. Numerous training initiatives have been launched, but it will still be difficult to fill the shortage quickly.
“The watch industry has long been aware of the importance of passing on know-how. It now offers modern and attractive working conditions which place it in a good position in the competition between employers to attract skilled labour,” Voillat says.
Edited by Virginie Mangin. Translated from French by Anand Chandrasekhar/ts
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