* Growth seen slowing in 2012 from record levels in 2011
* Brands keep stock level, production growth under control
* Asian demand still in focus
By Victoria Bryan and Nathalie Olof-Ors
GENEVA, Jan 18 (Reuters) - Swiss watchmakers expect slower growth this year after a record 2011 as strong demand from Asia is unlikely to make up for weakness in America and Europe, executives at the Geneva watch fair warned this week.
Demand might not have softened yet for some but many watch brands predict that worries about euro zone debt and unemployment in America will weigh on discretionary spending.
"Brands are worried about Europe," Jean-Daniel Pasche, head of the Swiss Watch Federation, told Reuters. "It's not like buying milk. If things are bad, people stop buying watches."
Pasche confirmed expectations expressed by Hublot and Swatch Group earlier this month that the Swiss watch industry's growth would slow down in 2012 after a 22 percent rise last year to record levels.
Swatch Group, the world's biggest watchmaker whose brands include Omega, Longines and Breguet, predicts 5-10 percent growth this year..
Emmanuel Vuille, chief executive of niche watchmaker Greubel Forsey, said it was difficult to see how the industry could remain untouched by what was happening in the world.
"We hope that growth will continue, but we are very cautious. There are a lot of watches in the shops that aren't on people's wrists."
Already, jewellers Tiffany & Co, Zale Corp and Signet have published disappointing sales figures for the holiday season in Europe and America..
Meanwhile, British brand Burberry on Tuesday reported a sharp slowdown in U.S. sales and gave a weak outlook, , contrasting with Swiss luxury group Richemont which said sales in the quarter to Dec. held up well.
Also weighing on the industry are potential production bottlenecks stemming from Swatch Group's decision to cut supplies to rival watchmakers starting this year.
While brands from 257 year-old Vacheron Constantin to 21st century newcomers Greubel Forsey said they were investing in production, they said they were also mindful of the previous crisis of 2008/2009 when they were left with unsold stock.
"We tend to produce less than the demand," the CEO of independent watchmaker Parmigiani said. "We like to remain conservative because we don't want to end up in the same situation as 2008/2009."
Overall a tone of cautious optimism prevailed at the fair, the first major gathering of the luxury goods industry in 2012.
"We've had a 20 percent increase in enquiries from customers at the fair compared to last year," said Jean-Marc Pontroue, the incoming CEO of Roger Dubuis. "But we are in a world that is highly uncertain."
Bernard Fornas, chief executive of Richemont's biggest brand Cartier which had the largest stand at the fair, said the industry was in a "period of volatility."
But Girard-Perregaux, controlled by Gucci owner PPR , struck an unusually bullish tone for 2012.
"It's just been two days, but so far the fair meets our expectations. I think the trend will be the same as last year," said Girard-Perregaux CEO Stefano Macaluso.
The luxury industry proved more resilient to economic turmoil than other consumer goods markets last year as strong numbers from leading groups such as LVMH, Richemont and Burberry showed.
Much of the growth came from China, where brands have been racing to open shops in the past three years. But there is growing concern demand from China could cool.
Richard Mille, one of the industry's most expensive brands with models starting at 60,000 euros, said it did not believe China could be described as a bubble.
"There could be an (downward) adjustment, yes, but I don't see a bubble bursting," said Richard Mille, founder and chief executive of the brand.