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Unemployment Increasing in Watch Sector

The fortunes of the luxury watch making sector in Switzerland have continued to plummet with the number of workers joining the unemployed increasing 13.2% in one month.

The official rate of unemployment in Switzerland across all sectors is now 3.4% — although, as in all countries these official statistics are vigorously massaged and include only those currently receiving unemployment benefits.

At the end of March there were 135,000 unemployed enrolled at regional placement offices (ORPs), about 2500 more than in February, according to the federal government’s SECO. Compared to March 2008, the number of unemployed increased about 30%.

According to the statistics, unemployment affects foreigners more than Swiss with the respective rates 6.9% and 2.4%.

The number of long term unemployed – those who have been looking for more than a year– remains so far relatively stable: there were roughly 16,000 in March 2008 and there are roughly 16,000 now.

The SECO is planning for an unemployment rate of 3.8% for 2009 and 5.2% for 2010.

At the moment, the sectors hemorrhaging the most jobs are banking/finance and luxury industries. However other industries heavily export-oriented have also been affected, like machine tools. In the luxury watch industry, the number of jobs lost over the past few months has been striking.

Unemployment is also becoming a serious problem among youth, with the number of unemployed among 16-24 year olds rising to 4% from 2.9% last year.

Reductions in working hours – so called ‘partial unemployment’ – in which workers work fewer hours and are paid proportionally less, has continued to progress as well. For many months the banks have been letting go employees each month in drips of 10 or 20 at a time. The luxury watch sector is the most recent casualty of the global downturn, in terms of its impact on the local economy.

Sectors such as pharmaceuticals and agroalimentary industries are doing very well, despite the terrible economy, with Nestle recently announcing its intention to hire several hundred new employees over the next 12 months.

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