Exports of Swiss watches are likely to contract by 30 per cent in 2020 as major markets continue to face economic and geopolitical uncertainties alongside a significant plunge in international tourism.

According to the Federation of the Swiss Watch Industry FH, shipments plummeted 35.7 per cent in the first half of 2020 to CHF6.9 billion (US$7.46 billion) from CHF10.7 billion (US$11.58 billion) last year.

The group described it as an "unprecedented crisis," noting that after a promising start to the year, exports began to sink sharply in March before coming to a halt in April and May, owing to the Covid-19 pandemic. 

Slight signs of recovery, particularly in China, were seen in June, eventhough the overall decline was still substantial. 

Watch exports were down 35.1 per cent in June, with China recording a sharp year-on-year increase in demand of 47.7 per cent. All other markets stayed in negative territory: Hong Kong (-54.6 per cent); the US (-57 per cent) and the United Kingdom (-44.7 per cent). 

According to the federation, the most severe consequences of the pandemic were felt in the second quarter, which saw exports dip by 61.8 per cent.

Market recovery hinges upon strong consumer confidence but this will take time to stabilise. Top export markets the US and Hong Kong are still battered by political and health crises while Europe is reeling from a drastic drop in international tourism.

Citing data from industry players, the federation said international travel could take three years to return to normal, creating a long-term obstacle to sales of luxury goods, including watches. 

During the first half of the year, wristwatches generated 95 per cent of export turnover but fell by 35.3 per cent in value compared with the first half of 2019. Switzerland exported 5.5 million watches in H1 2020 from over 10 million last year, representing a 44.9 per cent fall.

"The decline in the first half of the year reflects more the disruption and stark overall reduction in movements of goods than a real change in demand," the group said. "All markets fell sharply between January and June. China was the exception, with a decline of only 14.6 per cent. For the moment, other markets are showing no real signs of recovery in terms of watch exports."