PARIS, April 22 (Reuters) - The recovery of the Swiss watch industry accelerated in March with exports up 33 percent versus the same month last year, the Federation of the Swiss Watch Industry said on Thursday 22 April.

Vacheron Constantin, a Richemont Group brand

Total Swiss watch exports reached 1.2 billion Swiss francs ($1.12 billion), buoyed by improved demand in the United States and strong growth in China and Hong Kong.

However, the Federation said the main European markets "lost ground (during the period under review) even though Germany recored a double-digit increase".

The growth marked a sequential monthly improvement as Swiss watch exports rose 14.2 percent in Feb. and 2.7 percent the previous month, signalling the industry was turning its back on the black year of 2009 during which exports dropped 22 percent.

"The recovery is therefore clearly confirmed, with the first quarter showing an upturn of 16.6 percent and a return to levels recorded in 2007," the federation said in a statement.

Growth was strongest in the 500-3,000 Swiss francs price segment which was up more than 45 percent while the segment above saw growth of 40 percent.

Analysts said sustained recovery in the higher end of the watch market would particularly benefit Richemont (CFR.VX) and Swatch (UHR.VX).

By 0921 GMT, Richemont shares were up 0.3 percent at 40.24 Swiss francs while Swatch stock was up 0.8 percent at 329.20 francs and LVMH (LVMH.PA) was up 0.3 percent at 87.81 euros.

"The combination of improving economic conditions, financial wealth and consumer sentiment, lower inventory levels in the trade, retail capacity withdrawal and a much softer basis of comparison until November 2010 should support demand for Swiss watches," Citi said in a note.

(Reporting by Astrid Wendlandt; Editing by Michael Shields)