UPDATE: Swiss Watch Exports Rise Real 14.5% On Year In August

Swiss watch exports in August rose 14.5% year-on-year in real terms despite a tough comparison and growing economic uncertainty, according to data released Tuesday by the Swiss customs office.

Exports of Swiss watches last month were worth 1.29 billion Swiss francs ($1.47 billion). In nominal terms, which aren't adjusted for inflation, the gain was 16.4%.

In addition to the traditional hot spots in China and Hong Kong, exports to Italy jumped 43%, the second-biggest rise in the top 10 global markets for Swiss watches.

Analysts said consumers in Italy could be buying watches as a store of value amid the country's economic uncertainty.

France was the only major market to report a decline, down 6%, according to figures from the Swiss watch industry association.

Swatch Group AG (UHR.VX), Compagnie Financiere Richemont SA (CFR.VX) and privately held Rolex are the main producers in the Swiss watch market.

The increase last month came on top of an extremely strong August last year when exports rose 24.1%. Unit numbers rose 19.9% to 2.1 million watches during the month, the Federation of the Swiss Watch Industry FH said.

Hong Kong retained its top spot as the main export destination, with 21% of all Swiss watch exports heading to the territory. Watch exports to Hong Kong rose 18.4% to CHF271.1 million in August.

Patrik Schwendimann, analyst at Zuercher Kantonalbank, said he expects the high pace of growth to gradually slow over the next few months as a result of weakening consumer confidence in Europe and the U.S., and tougher comparisons.

He expects watch sales this year to be 18% to 19% ahead of last year, which he thinks could slow to a 6% increase next year.

"During the financial crisis of 2007/2008 there was a time lag of a full year before the luxury goods sector and watch export statistics exhibited a deterioration in numbers," he said.

Rene Weber, analyst at Bank Vontobel In Zurich said he still expects 2011 watch exports to be around 15% ahead of last year.

But for 2012 he expects a slowdown in growth to high single-digit percentages next year, with slowdowns in Asia, Europe and the U.S.

"Sales into Asia have been very strong for the last two years, and this trend cannot continue," Weber said.

At 0940 GMT, Swatch shares traded up 2.3%, and Richemont shares were up 2.8% on the Swiss Market Index, which traded up 0.3%.

By John Revill, Dow Jones Newswires; [phone]; [e-mail]