Despite Dire Predictions, US Diamond Demand Leaps To New RecordApril 27, 2016 (0 comments)
London, UK--Diamond jewelry demand in the United States hit a record level of US $39 billion last year, according to data published Tuesday by the De Beers Group of Companies.
Diamond jewelry demand by U.S. consumers increased 5% in 2015 over 2014 levels, thanks to sustained economic recovery, higher levels of job creation and wage growth, and—despite grim predictions to the contrary—Millennials. The United States accounts for 45% of global polished diamond demand, up from 42%. The chart at left, from De Beers, shows the breakdown of polished diamond demand around the world.
Chinese demand also grew last year; it was up 3% in RMB, and includes acquisitions by Chinese abroad. But demand from consumers in the Japanese, Indian, and Gulf consumer markets saw some declines in local currency terms in 2015, with the strength of the US dollar further impacting growth rates when translated into US dollar terms.
At constant currency, global consumer demand for diamond jewelry grew 2% last year. But the strength of the US dollar negatively impacted growth at actual exchange rates, with global consumer demand for diamond jewelry in US dollar terms reaching US $79 billion in 2015, a 2% decline on the record US $81 billion seen in 2014.
- Despite positive general macroeconomics in India, consumer demand reduced by 4% in local currency as it was impacted by a decline in overall consumer spending, driven by several factors including restricted credit.
- Japanese consumer demand was broadly flat in local currency terms, but the Yen depreciation led to a 13% decline in US dollar terms.
- Demand in the Gulf region declined 3%, with oil price weakness and lower visitor numbers affecting growth.
- Growth in the rest of the world declined 13% in US dollar terms, largely as a result of macroeconomic weakness in emerging markets and the strength of the US dollar.
The outlook for 2016 is driven by expectations of steady but subdued global economic growth, with weakening growth in emerging markets and a fragile recovery in the advanced economies. The United States is again expected to be the main driver of growth in 2016.
Philippe Mellier, De Beers Group CEO, said,“Despite 2015 being a challenging year for rough diamond demand, consumer diamond jewelry demand was robust. Encouragingly, the US—the largest and most mature market—continues to grow the strongest, while China continues to grow from an increasingly larger base. There remains a positive medium to long-term outlook for diamond jewellery demand, driven by the US and the growth of the middle classes in emerging markets.”