Swiss Exports Rise to Record in October

Swiss exports exceeded 18 billion francs ($16.2 billion) for the first time in October as a weak franc supported foreign demand for Swiss products.

Sales abroad, adjusted for inflation and seasonal swings, rose to a record 18.8 billion francs from 16.4 billion francs in September, the Federal Customs Office in Bern said today. Imports also increased to an all-time high. The unadjusted trade surplus fell to 1.56 billion francs from a revised 1.70 billion francs.

This year's 4 percent decline in the franc against the euro by the end of October boosted the sales of goods like Emmentaler cheese and Swatch watches in the 13-nation currency area that buys more than half of Swiss goods sold abroad. Companies like power- network builder ABB Ltd. and luxury-goods maker Cie. Financiere Richemont SA are now looking to markets like India and China for sales as the U.S. and European economies show signs of a slowdown.

Shipments of Swiss watches to Hong Kong, where wealthy Chinese take advantage of lower taxes on timepieces, rose 15 percent from the previous month, the Federation of the Swiss Watch Industry said today.

From October 2006, exports rose 10.5 percent when adjusted for inflation and gained 5.8 percent when also adjusted for the number of working days. Adjusted for seasonal swings and inflation, sales abroad declined 0.2 percent from September.

Exports to the European Union increased 13.3 percent from October 2006, while sales in transition countries including China and Russia grew by almost 54 percent.

Since the beginning of November, the franc has recovered 2 percent of its value against the euro, eroding the competitiveness exports have enjoyed during the franc's decline.

At the same time, a stronger franc may boost Swiss purchasing power. Imported consumer goods rose 9 percent from a year earlier and 9.4 percent more investment goods were purchased from abroad.

Swiss Exports Rise to Record in October, Bloomberg
11/20/2007 7:00:04 AM