Swiss watch exports declined slightly in July, the first monthly drop in more than two years, as demand for pricey timepieces begins to slow amid higher prices and economic pressures. 

Shipments fell by 0.9% last month to 2.2 billion Swiss francs ($2.5 billion) with China driving the downturn, the Federation of the Swiss Watch Industry said Tuesday. 

Exports to China, the second biggest market behind the US, fell 16.6% following a surge last year. Singapore, another key market, suffered a 7.9% drop compared to a strong rise a year ago.

The decline suggests booming demand for expensive Swiss timepieces may be starting to cool after climbing to a record above 24 billion francs in 2022. Brands from Omega to Patek Philippe and Rolex have raised prices to offset higher input costs, boosting sales and profits amid the upswing.

Zuercher Kantonalbank analyst Patrik Schwendimann said the monthly drop in exports was unexpected and could negatively impact shares of Richemont and Swatch Group AG.  

“However, as usual, a single month of watch exports should not be overestimated, as it is not a sales figure,” he said, predicting export growth to return in August and September.

The last time Swiss watch exports suffered a monthly drop was in January 2021.

The federation said the slight downturn “will not have a significant impact on the general trend or forecasts for 2023,” suggesting the industry can still hit a new record again this year.

Exports declined across all price segments with the exception of watches priced above 3,000 francs, which gained 2.2% by value. 

Shipments to the US, which overtook China as the biggest market in 2021, increased by 5.2% in July, indicating demand is still growing in the largest market for Swiss timepieces.