The Swiss watch industry has not recovered from the Great Recession of 2009. But Baselworld showed that it is recuperating.
In Switzerland’s watchmaking region, in the weeks before the mid-March opening of the annual Baselworld watch and jewelry fair, people were calling the 2010 show “le salon des tous les désespoir” – “the exhibition of the desperate.”
Surprisingly strong retail watch sales in December, which buoyed spirits at the SIHH exhibition in Geneva in January, were not enough to cure what ails the Swiss watch industry. As Credit Suisse noted in a comprehensive survey of the Swiss economy in January, “The watchmaking industry is currently in its most severe crisis since the traumatic watchmaking crisis of the 1970s.” Swiss watch exports fell a gut-wrenching 22.3 percent in 2009.
The Great Recession hit watchmaking harder than any other industry in Switzerland, measured by the unemployment rate, according to Credit Suisse. Heading into 2010, watchmaking had the highest unemployment rate of any sector of the Swiss economy, ranging from 10.8 to 12.7 percent, depending on whose numbers you use. In a country where unemployment is normally 2 percent, and where the current national unemployment rate of 4.1 percent is considered scandalously high, the watch industry, whose unemployment rate soared eight points within six months last year, is a disaster zone.
Hence, the grim hope in the battered watchmaking cantons of Jura, Neuchatel, and Solothurn that Baselworld would provide some measure of solace for tous les désespoirs.
On the scene reports indicate that it did. WatchTime spoke with numerous watch executives at the show about the state of the global watch market. All were reluctant to declare the crisis over. “I cannot tell you that the crisis is over,” said Patek Philippe CEO Thierry Stern. “We believe that we are still in the middle of the tunnel. 2010 is still dangerous.” But all the executives believe that the worst of the crisis is over and the industry is on the mend. The mood at Baselworld was infinitely better than the funereal atmosphere of the 2009 show, when the global watch market appeared to have collapsed. This year, a number of green shoots at Baselworld nurtured hopes that a recovery was either beginning or on the horizon.
To read the complete report on Baselworld 2010, look for WatchTime’s May/June edition, due out in mid-May.