PARIS — Is it the inflection point for Swiss watches?
Exports in March grew by 1.5 percent in value to 2.1 billion Swiss francs despite a 4.8 percent slump in volume, according to figures released by the Federation of the Swiss Watch Industry on Thursday.
This amounted to a first quarter that shrank 1.1 percent against the same period in 2024, and down almost 6 percent against 2023.
A Bernstein research note pointed out an upwards trend, with 0.6 percent growth since January and a 7.5 percent increase from February.
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Driving the growth in the month was the U.S., as the top market for Swiss watch exports, which leapt 13.7 percent. Japan, still in second place, rose 1.1 percent while the U.K., now in the leading trio, grew 10.6 percent.
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In fourth and fifth place respectively, Hong Kong and China were neck-and-neck. Both markets were down more than 11 percent but for the mainland, it was a marked slowing of its decline.
In figures published earlier this month by ING, China’s gross domestic product rose 5.4 percent year-on-year in the first quarter. Separately, the country’s National Bureau of Statistics said its economy had expanded by 1.2 percent on a quarter-to-quarter basis.
In materials, steel watches led the charge, growing 4.2 percent in volume and 5 percent in value.
Meanwhile, other material categories all shrank in volume. Precious metal timepieces, the second-largest category, recorded a 1.9 percent increase in value, hinting at a potential impact from surging gold prices.
By price category, all segments were down in volume, with the troubled 200-to-500 Swiss francs sector showing the biggest decline at 17.5 percent.
In value, pricier timekeepers, starting at 500 francs and including the above-3,000 high-end segment, showed a cumulated 1.9 percent increase, which blunted the decline of the lower-end of the market.
But it may be too soon to pop the Champagne, as the sector girds in the face of the Trump administration stop-and-go approach to tariffs.
There is the prospect of a 31 percent levy on Swiss products imported to the U.S., announced on April 2. Execution of tariffs for all countries except China has since been suspended by Trump for 90 days, leaving Switzerland with the 10 percent rate applied globally that kicked in on April 5.
Bernstein senior analyst Luca Solca said “a path to a cyclical recovery now looks increasingly uncertain.”
The uptick in exports to the U.S. may have stemmed from companies anticipating the Trump administration’s tariffs policy. The April 2 announcement has introduced global macroeconomic uncertainty.
“We believe this uncertainty will weigh on a recovery, not only from the first order impact of tariffs on Swiss exports into the U.S. but also on the ripple effect on global currencies and consumer feel-good,” he said.
Solca expected the most desirable brands, which include Rolex and Cartier, to remain top-of-mind while other brands “will need to work harder to recapture consumer attention.”
March’s export figures come as luxury groups have started to report their first-quarter sales.
Sales were flat at the watches and jewelry unit of LVMH Moët Hennessy Louis Vuitton, although the group highlighted “good progress on strategic priorities.” Tag Heuer returned as official timekeeper for Formula 1 in January, as part of a global 10-year deal with LVMH.
At Hermès, watchmaking saw a 10 percent decline for the quarter, with the company citing “a still challenging context” while highlighting new launches including iterations on the popular H08 line and its Watches and Wonders novelties Le Temps Suspendu Arceau and Hermès Cut designs.
Compagnie Financière Richemont, which owns Cartier and watchmakers including Jaeger-LeCoultre, Panerai and Vacheron Constantin, will report earnings on May 16 for its fiscal year 2025 that ended on March 31.