* Exports fall 3.4 pct yr/yr in Aug
* Sales to Germany slide 10.2 pct
* One less working day than a year ago dents volumes
ZURICH, Sept 18 (Reuters) - Switzerland's exports fell in August for the first time since May, due to lower sales of chemicals, pharmaceuticals and machinery and electronic products, data showed on Thursday.
Demand from the rest of Europe, Switzerland's biggest export market, weakened, noticeably in Germany.
Exports dropped by an inflation-adjusted 3.4 percent year-on-year in August to 14.859 billion francs ($15.8 bln), but were up 0.5 percent on a nominal basis, according to the data from the Federal Customs Office.
There was one working day less in August this year than in 2013, another reason for the decrease. Adjusted for working days, exports rose 1.4 percent in real terms and 5.5 percent in nominal terms, the office said.
Exports to the rest of Europe, Switzerland's largest trading partner fell 2.6 percent in nominal terms, including a 10.2 percent drop to Germany, the office said.
Europe absorbs almost 60 percent of Swiss exports. A strong Swiss franc has made Swiss goods more expensive abroad, but that effect has been softened by a cap imposed on the value of the franc almost three years ago.
Sales of pharmaceuticals and chemicals, the country's largest export category, fell 5.5 percent in real terms, while sales of machinery and electronic products were down 7.3 percent.
Watch exports rose 0.7 percent in real terms, but fell 0.2 percent in nominal terms to 1.493 billion francs. Sales to Hong Kong, the biggest market for Swiss watches, fell 8.4 percent in nominal terms, the Federation of the Swiss Watch Industry said, while sales to China continued a recovery with a 16 percent rise. (1 US dollar = 0.9405 Swiss franc) (Reporting by Silke Koltrowitz; Editing by Susan Fenton)