BASEL ? The glittering watch and jewelry industry is bracing for a grim year as the economic crisis takes away its sparkle, industry players said on the eve of the Baselworld watch fair.

The annual trade show in the northern Swiss city of Basel, which opens on Thursday, is the largest global showcase for the watch and jewelry industry.

Executives in the industry travel every year here to view new products and to place orders for the year.

But the host country's watchmaking industry, the world's biggest and a barometer of the global sector, has been struggling in recent months after the bottom dropped out of a booming market towards the end of 2008.

In February, Swiss watch exports plummeted 22.4 percent year on year.

Major names in the normally steady luxury end of the market, such as Rolex, Girard-Perregaux, Corum, Raymond Weil, Roger Dubuis, HGT, and Cartier's Swiss plants have announced plans to cut work hours or reduce jobs in recent weeks.

About 1,000 jobs have been lost in the watchmaking belt in the northwestern Jura hills, the Swiss newspaper Le Temps estimated.

Not just the Swiss, but others in the industry are also feeling the pinch.

Jacques Duchene, who heads Baselworld's exhibitors committee, observed that the tide had turned over last year for watch and jewelry makers.

While the industry made "one of the most positive press announcements" last April, by mid 2008, "a less than favorable global situation meant the first signs of decline were being felt", he noted.

"Our sectors were directly and sometimes severely affected, once more allowing the problem of unemployment to emerge."

Pointing to the watch manufacturing, jewelry and its related sectors, Duchene said: "The latter are ... particularly vulnerable."

"Their main problem is on the one hand due to a lack of orders and on the other hand to a lack of assets, combined with a lack of visibility in some cases," he said.

The squeeze being felt by component suppliers was confirmed by Robert Buchbauer, the chief executive of Austrian crystal-maker group Swarovski, who described the downturn experienced by the group's components business as "quite substantial."

"This is because companies are making less and stocking less goods," he said.

Consumer sales while suffering a "slight slowdown" from double-digit growth, is still growing at single-digit, he said.

Buchbauer expects full year sales for the group to be flat or slightly negative, as "the growth on the consumer side is being compensated by the slowdown in the components business."

A recovery, meanwhile, is not seen until next year.

"We are taking a conservative view on this, we see a pick-up only in mid-2010," he said.

The chief executive of Hublot, Jean-Claude Biver, said the group has not been hurt by the crisis so far, but he noted: "It is clear that there would be a slowdown for the watch sector as a whole."

Besides the crisis, sharp rises in prices for raw materials such as gold are weighing on earnings.

"With the continued increases in gold prices, 2009 is going to be a very problematic year," assessed Gaetano Cavalieri, speaking on behalf of Italian exhibitors.

"When people are losing their homes, clearly they are not in the mood to buy jewelry."

Trends in watch and jewelry materials -- more leather or synthetic straps for French exhibitors, and more platinum rather than gold in jewelry for Swiss manufacturers -- appear to reflect ways in which companies are seeking to lower costs.

Meanwhile, Sylvie Ritter, show director of the fair, admitted that the number of buyers would "definitely be down on last year."

The seven-day Baselworld showcases around 2,000 exhibitors from 45 countries.