With the staging of the world's most important watch and jewelry show, Baselworld, in Switzerland starting today, many horology enthusiasts and analysts speculate a somber mood during the event, eliciting fears of declining sales for the Swiss watch industry.
The current economic and political turmoil in Japan and Middle-East have left deep imprints on the global watch and jewelry industry; more so for the Swiss market.
One of the largest markets for the Swiss watch industry, Japan imported around 5 percent of the total horology exports of Switzerland in 2010 while shipments increased for the first time since the global economic downturn by 4.9 percent.
As per the Swiss watch exports distribution report released by the Swiss Watch Federation (FH) last month, there has been a 3.4 percent rise in sales during the 2010-2011 period as compared to 4.7 percent decrease during the 2009-2011 period.
The March 11, 2011 earthquake and tsunami has caused widespread damage to life and property in Japan. A report released by the World Bank on Monday states that the damage estimates might reach $235 billion.
The country's government, however, said that the cost estimates could be as high as $309 billion, making it the world's most expensive natural disaster on record. It is also estimated that real GDP growth will be negatively impacted through mid-2011 and it would take around five years for reconstructive efforts to accelerate.
The Middle-East turmoil, on the other hand, has also brought radical changes in the luxury watch industry.
Bloomberg Businessweek quoted Renaissance BJM analyst Rey Wium stating that the current scenario in the Arab countries would weigh on the industry more if it spreads to bigger markets in the Middle East such as Saudi Arabia.
But, despite all odds, the organizers of Baselworld remain optimistic maintaining that there have been no cancellations by Japanese exhibitors for the 2011 event.