Swiss Watch Exports To US Drop For First Time In Two Years As 'Rich' Consumer Falters

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by Tyler Durden
Saturday, Jun 03, 2023 - 11:35 AM

Adding more evidence to our previous note, "There Goes The US Consumer," is new data that shows monthly Swiss watch exports to the US declined in April for the first time in two years. The significance of this data might reveal wealthy individuals are reducing their spending, particularly on luxury items, such as timepieces, amid fears of recession. 

On Thursday, the Federation of the Swiss Watch Industry released a report that shows exports to the US fell 4.9%. The decline was the first since Jan. 2021. Besides the US, Singapore recorded a monthly decline. However, Swiss watch exports to China recorded a massive surge due to the reopening of its economy following several years of draconian lockdowns.

Bloomberg pointed out that Patek Philippe, Oris, and Zenith have recently warned about sliding demand for their products. 

Despite weakness in the US and Singapore, total Swiss watch export continued higher in April, increasing by 6.8%. Moreover, the exports are up 10.5% in the first four months of the year. 

Another sign of US consumer weakness is the Bloomberg Subdial Watch Index, which tracks prices for the 50 most-traded watches by value on the secondary market, showing prices are down 26% over the last 12 months.

Slumping US demand for luxury timepieces is more evidence consumers are dialing back spending as the Federal Reserve has aggressively raised interest rates in the last 14 months and risks sparking a recession. 

All of this adds to the narrative the luxury bubble just "burst."