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New data on Swiss economy: record export and sales of watches

New data on Swiss economy: record export and sales of watches

20 July 2018

New data on Swiss economy published this week showed some record figures in terms of export and new heights in watches’ sales. Additionally, it turns out that Switzerland is the most innovative country in the world.

Record export

The Swiss export reached a new record for quarter with its data for the Q2 of 2018. Export in Switzerland surpassed its recent growth mainly due to pharmaceuticals’ sector good results. Totally, export in the second quarter was at CHF 55.7billion (EUR 47.8 billion), as data published by Swiss Federal Customs Administration showed. Apart from pharmaceuticals, also machinery and precision instruments sectors were on the huge rise, as so was watchmaking. Good results were also recorded in cars, food, tobacco, beverages or jewelry branches. Record export was registered to China, Germany or the USA. The driving force for export new record results was pharmaceuticals with 42 percent of the global increase. One of the great example was Novartis, that reported its net profit for Q2 at EUR 6.7 billion, whereas net sales surge 9 percent up to EUR 11.33 billion. Jewelry companies in Switzerland were another great example of results that drove the growth in export, as they rose by CHF 598 million in Q2. It is noteworthy to mention that export from Switzerland to Germany hit an all-time high point, increasing by 4.5 percent. Generally, the value of export surge by CHF 4.58 billion (EUR 4.1 billion) since the first quarter of last year.

Watches’ sales surge

On Wednesday, Swatch, the Swiss watchmakers, who is the number one in the world, published its half-year sales. Results were record – all time high. Net profit for H1 2018 of the group Swatch rose by as much as 66.5 percent year-to-year to CHF 468 million (EUR 401 million). Net sales of H1 2018 were up 14.7 percent to CHF 4.27 billion (EUR 3.7 billion) comparing with previous year. Operating profit for January – June 2018 surge to CHF 629 million (EUR 539 million), up 69.5 percent as compared to H1 2017. It is much improvement comparing to 2016, which was considered quit a bad year for Swatch. Sales drop back then by 10 percent. Also, in 2015, sales were down by 3 percent. Last year the watchmaker returned to gain profits as sales went up, but this year turned out to be record when it comes to sales growth. What drive sales of watches? Swatch think it has millennials to thank for the fantastic results. The new generations become highly interested in watches. Consumer demand rose in all segments – both luxury watches that Swatch is famous for, and plastic cased, colorful watches that become its flagship product. Luxury segment, middle and low prices segment reported rise in sales. The highest growth was noted in Asia, when it comes to geographical diversification, but also North America has a double-digit increase in sales. In previous years, the world’s biggest watchmaker struggled with competition from smartphone or smartwatches. It looks like people are coming back to be keen to have a traditional watch on their wrist, accompanying their smartphone or other gadgets.

The most innovative country

Apart from some fantastic economic data, Switzerland recently has received a title of the most innovative country in the world. It is eight time in a row that Switzerland win this accolade, as given by World Intellectual Property Organization. It is a very complex ranking taking into the account 80 indicators, including environmental performance or knowledge-intensive employment, as well as Wikipedia edits statistics. Runners-up were Netherlands, Sweden, the UK and Singapore. Switzerland did well in environmental performance (1st place), political environment (2nd), regulatory environment (5th), however there were also some fields of the ranking where it scored quite poor results, like: easy of starting a business (59th) or expenditures on educations shown as percentage of GDP (50th).

The good data from the Swiss economy show that the markets have overcome the low EUR CHF exchange rate. From the Frontaliers point of view it has been a very good exchange rate over the past three years, but not from the point of view of the export industry. A good EUR CHF exchange rate reappeared in the past year. The Euro has turned slowly stronger against the Swiss Franc.

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