De Beers said the global demand for diamond jewellery leaped 3 percent last year, rising to a new $81 billion high.
The group’s industry insight data published Friday showed that there was positive growth in consumer demand for diamond jewellery in local currency terms in 2014 across all the top five diamond markets, which between them account for about 75 per cent of global demand.
Consumer demand in the US, the world’s largest market for diamond jewellery sales, was particularly strong, increasing seven per cent on 2013 levels to a total of $37 billion, it said.
China was also a significant driver of global growth, with demand increasing six per cent in 2014 to a total of RMB 62 billion ($10 billion).
De Beers said although this was below the growth rate in 2013, it still represented a substantial increase as the consumption base has grown so rapidly in recent years.
The Indian market saw growth of 3 percent in local currency terms to INR 220 billion ($3.6-billion), with lower consumer confidence in the first half offsetting a stronger second half.
However, the depreciation of the Rupee against the US Dollar meant that the Indian market saw a one per cent decrease in US Dollar terms, it said.
The Japanese market exceeded expectations, achieving positive local currency growth of 2 percent, driven by the upsurge in the first quarter spending prior to the consumption tax increase.
However, the sharp depreciation of the Yen against the US dollar eroded that to negative growth of 11 percent in US dollars, it said.
“2014 was another strong year for diamond jewellery demand across the world, as we saw continued growth across both mature and quickly developing markets,” said De Beers' chief executive Philippe Mellier.
“Retailers are also positive about the prospects for 2015 and, while there are some potential headwinds, the stage is set for another good showing across the major consumer markets.”
“As the number of middle class households in the major consumer markets is set to grow by hundreds of millions in the years ahead, the medium to long term prospects for the diamond industry are also exceptionally strong if the right investments continue to be made across the value chain.”
De Beers said sales growth over the holiday season accelerated in India, where expectations going into 2015 were for continued strengthening of growth rates.
However, the fourth quarter of the year saw a slower pace of growth across the luxury goods category in both the US and China, it said.
The group also noted that there was a trend towards less Christmas gift shopping immediately before Christmas in the US, driven by early retail promotional activity.
Growth in China was impacted by a softer macroeconomic environment and the protests in Hong Kong, it said.
De Beers said its surveys show that the outlook for diamond jewellery sales growth was positive this year across all main markets as retailers anticipate another year of growing consumer demand.
Optimism among jewellery retailers was highest in the US and India, while growth in China was expected to pick up after the Chinese New Year, the group said.
In terms of global share of demand for polished diamonds (measured by analyzing the Polished Wholesale Price value of diamonds contained in diamond jewellery), De Beers said the US remained the largest market, increasing its share to 42 percent in 2014 compared with 40 percent in 2013.
China, including Hong Kong and Macau, remained the second largest market with 16 percent. India and the Gulf region were the next largest markets with 8 percent shares, followed by Japan with 5 percent, slightly down from 6 percent in 2013.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
