A water-resistance demonstration on the stand of Swiss watchmaker IWC, on the opening day of the Watches and Wonders Geneva luxury watch show, on March 27, 2023, in Geneva (Switzerland). FABRICE COFFRINI/AFP
The canton of Jura has plunged into uncertainty. Located in northwestern Switzerland, this region, one of the main production areas for Swiss watches, is facing a clear deterioration in sales of watchmaking products abroad. “Exports recorded a sharp drop in September,” said the Federation of the Swiss Watch Industry, in its monthly note, published on Thursday, October 17. The fall reached 12.4% in value terms, after a brief upturn during the summer, marked by a 6.9% rebound in August.
The sector, which depends on the good health of the American (15.6% of its exports in 2023) and Chinese (10.3% for China and 8.8 % for Hong Kong) markets, has been questioning the evolution of the economic situation. In September, watch exports plunged by 49.7% in China and 34.6% in Hong Kong. Across the Atlantic, they rose by just 2.4%.
The market has completely turned around in the space of a few months. In 2022 and 2023, the Swiss watchmaking industry experienced a boom in foreign sales. To meet the influx of orders, watchmakers hired like crazy. As a result, the sector’s workforce jumped by 7.7% in 2023, to 65,000, according to figures from the Employers’ Convention of the Swiss Watch Industry. Among them are almost 25% of French nationals, who cross the border to work in the country.
Today, however, orders are slowing down, and most watchmakers’ inventories are full. Several companies have appealed to the State to reduce working hours in their workshops and to cover the wages of the employees concerned, up to 80% for 18 months.
Negative forecasts
These so-called RHT (reduced working hours) measures have been put in place, notably within the Sowind group, which owns Ulysse Nardin and Girard-Perregaux, two former subsidiaries of the Kering group which was sold to its management in 2022. In these two factories, based respectively in Le Locle and La Chaux-de-Fonds, RHT measures have been implemented on an ad hoc basis since spring. They concern “just over 15% of the workforce, i.e. 50 of the 300 employees in Switzerland,” said Patrick Pruniaux, director general and co-founder of the Sowind Group.
Subcontractors are also making use of the Swiss RHT. “In general, they are the first to have to reduce their workforce,” said Raphaël Thiémard, head of the Unia trade union. According to the Employers’ Association of the Swiss Watch Industry, some 15% of the 700 companies in the sector are affected. For the time being, Unia is not worried: “The industry is always cyclical and the proportion of manufacturers who have made use of it is still marginal,” said Thiémard.
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