BASEL: Stagnant wage growth for the global middle class has been cited for everything from the rise of Donald Trump, the UK vote to leave the European Union and the referendum that prompted the resignation of Italian Prime Minister Matteo Renzi. I’d like to add a business victim to the list: Switzerland’s luxury watch industry.
The most basic Rolex Oyster perpetual watch retails at more than $5,000. Rolex doesn’t say how many watches it produces each year; COSC, the body that vouches for Swiss chronometers, says it gave Rolex almost 800,000 certificates in 2015. Based on the export data, it looks much like the global middle class or at least the upper end of it that might in the past have the disposable income for such purchases has indeed decided that, after not getting a pay rise for many years, there are better things to spend money on than Swiss wrist jewellery.
In the 2016 edition of its annual report on the industry, consultancy firm Deloitte noted that by the middle of this year, both the value and volume of exports had decreased for 14 consecutive months. In last year’s survey of industry executives, about 40 per cent were gloomy about the future; this year, that’s doubled to 82 per cent. And for the first time since the survey began in 2012, “the percentage of respondents who have a negative outlook for the main export markets exceeded those who are optimistic”, Deloitte said.
