Weak demand from Europe drags down Swiss exports

Swiss exports fell in December, data showed yesterday, dragged down by weak demand from Europe, the country's top trading partner.

Exports adjusted for the number of working days fell by 4.2 per cent to 14.04 billion Swiss francs, the Federal Customs Office said.

Unadjusted sales of goods to Europe dropped 10.2 per cent, while sales to Asia fell 8.6 per cent. "We've seen a net decline but, of course, the month had two working days less," said Alessandro Bee, an economist at Sarasin.

"Adjusted for this, there was still a drop but not as strong. This reflects the recession in Europe."

Exporters have benefited from the Swiss National Bank's cap of 1.20 francs per euro in place since September 2011, but they have also faced headwinds from weak demand in the neighbouring euro zone as the region's debt crisis hit confidence and output.

Swiss exports to China tumbled 24.9 per cent with sales of watches down 9 per cent to 1.76bn francs, the second decline of the year after a dip in September.

Richemont, the maker of Cartier watches and Montblanc pens, said last month that sales had ground to a halt in the Asia-Pacific region in the fourth quarter.

But the Swiss Watch Industry Federation described the dips as "one-off fluctuations", while Swatch Group said on Monday it was optimistic about this year after enjoying healthy growth last month.

Despite the drop in overall exports in December, other recent data suggests the Swiss economy may have emerged from a trough since the start of the year.

Swiss manufacturing activity expanded for the first time in 17 months in January, while investor sentiment showed a further improvement last month.

"Manufacturers are focused on exports: if they see the future in a positive light that will show in exports. The first half of 2013 should bring an improvement," said Mr Bee.

* Reuters