Eleventh consecutive month of growth - Record first half
The Swiss watch industry is currently experiencing a period of great prosperity with strong and uninterrupted expansion since August 1999. The first half of the year 2000 saw a new record: the value of exports stood at 4.72 billion francs, up 17.2% or 700 million francs on the same period of the previous year. Some sectors are now even stretched to the limits of their capacity. In consequence, the Swiss manufacturers have significantly increased their component imports in the past six months (up 36.4% in value for cases and 22.5% for wristlets).

The watchmaking branch has therefore derived the full benefit from a particularly favourable world economic context and a Swiss franc, which remains attractively priced in relation to the dollar. For some months now, it has also benefited from stock replacement in Asia.

Products
Despite this encouraging environment, volumes of complete watches exported have continued to fall. The manufacturers have exported 14.6 million units in the past six months, i.e. 3% less than in the same period of 1999. The value of these watches was 16.7% higher at 4.24 billion francs.

This further decline in volumes was mainly accounted for by plastic (-11.3%) and aluminium (-16.3%) products. The downturn affecting gold-plated watches for several months continued at a somewhat slower pace (-11.9%). Demand for steel (+12.5%) and 18 carat gold (+10.1%) watches has not been sufficient to offset these falls.

On the value side, over 80% of the growth is accounted for by steel watches (which generated sales of 1.85 billion francs in the first half of 2000, up 26.5% on the same period of 1999) and 18 carat gold watches (sales of one billion francs, up 15.2%). This trend has resulted in a particularly spectacular increase in the average price to 291 francs (242 francs one year earlier).

Among the other sectors of the watch industry, results for movements were particularly pleasing in the first half. Manufacturers exported 2.9 million pieces in six months, 22.9% up on the first half of 1999. In the same period, the value reached 58 million francs (+29.6%). Exports of high volume articles also grew strongly by 23.7% in value terms to reach 48.1 million francs.

Markets
The growth of exports was general on the fifteen main markets as shown in the table below (total value in millions of francs and % variation on the first half of 1999):

Growth of the American market has gathered pace in recent months. In Asia and the Middle East, business has recovered to the pre-crisis level on most markets. As the consumer climate is also very favourable in Europe, exports of Swiss watch products have increased, notably to France and Great Britain.

The high level of component imports and the confidence placed by manufacturers in recent surveys of economic sentiment lead us to believe that business in the branch will remain strong in coming months. However, a slackening of the growth rate must be expected in the second half to the extent that the closing months of 1999 were a period of particularly strong growth of watch exports.