United States has an appetite for bling

With stock prices scaling new highs and robust economic growth, Americans spent a record amount of money buying diamonds last year.

Demand in the US, which now accounts for more than half of the world’s diamond consumption, rose 4.4% to a record $41 billion last year, top producer De Beers said in a report on Friday. That helped offset contractions in China and India, where the company will be stepping up marketing to revive growth. Global demand edged higher by 0.3%, to $80 billion.

The US has expanded its market share in the past six years as wage growth, job creation and a strong stock market helped boost consumption, according to De Beers. That contrasted with purchases in key growth market India, where a jewellers strike and the demonetisation campaign led to a 13% contraction. Demand fell 10% in the Gulf region as oil prices remained depressed.

“While the US drove global growth in 2016, it is increasing demand from emerging markets that is behind the last five years being the strongest on record,” said Bruce Cleaver, chief executive officer of De Beers.

“Despite some markets facing challenging conditions last year, we see this trend continuing, with improvements in demand from China and India, in particular, emerging in 2017.”

De Beers expects a better performance in its key Asian markets in 2017 that should lead to “marginal” growth in global demand this year.

“Sentiment in oil-producing countries was poor because of the impact” of lower oil prices, Stephen Lussier, CEO of De Beers’ Forevermark, said. – Bloomberg