1990: U.S. Diamond Information Highlights U.S. Customers’ Elevated Confidence
The Diamond Information Center, De Beers’ agency in the U.S., reported a 9% growth in the diamond jewelry market in 1998 in the U.S. Total sales were over $22 billion they said, with an increase of 5% in average price paid per piece. These figures were felt throughout the wholesale diamond industry as diamond sales and wholesale diamond prices remained firm.
This trend continued in 1999, not surprisingly, the U.S. Commerce Department added to these findings that total retail sales in March rose two-tenths of 1%. Though not a large jump in itself, this percentage change is part of the ongoing pattern: January sales rose by 1.3% and February’s were up by as much as 1.7% in the continuing upward trend as total sales reached $239.6 billion with the January/February non-adjusted figures for jewelry stores coming in at $1,202 million and $1,713 million, respectively.
Everyday consumers have been the backbone of the upward movement. Made confident by the bullish market on Wall Street and the 4.2% unemployment level in March – the lowest since 1970 – consumer spending and a rising consumer confidence in the continuing availability of jobs is the bottom-line reason for the high numbers.
In global terms, the news is not all as good. The International Monetary Fund (IMF) is warning of a global slowdown in 1999 and 2000 due, in part, to the Kosovo situation. The group’s prediction for global growth for 1999 was 2.3% and 3.4% for 2000. In Paris, consumer spending rose with the traditional March fashion sales, but by healthy 1.6% rather than the average single percentage point rise. French exports to the Asian markets continue to decline, but the country’s economy does not seem to be unduly effected.
The economic growth forecast for Germany was reduced to 1.7% from 2.3%, the lowest since 1996. Blamed for the slow-down are Germany’s export markets, among them Russia and Asia. However, the German institutes for economic research predict that the exports will rise in 1999 and again in 2000 by 4.7%. In London, the strong British pound continued to leave British exporters in shaky straits with the Asian markets, even as Italy’s consumerconfidence took a nose-dive and retail sales in Hong Kong fell this quarter to HK14 billion. In Russia, the International Monetary Fund is holding the government up to two major audits – and possible changes in current laws – before loaning it any further funds, regardless of any possible diamond backing for those funds.
In contrast, U.S. consumer confidence remains at a record high according to the Conference Board index. In the Conference Board consumer expectations index, which covers the next six months, the figures rose again, this time from 105.5 in March to 108 in April. The April increase of the current confidence reading to 134.9 was the highest since July of 1998 at 137.2 and has been rising for six months in row. The readings have been over 130 for a period of 12 months, a level that has not been reached since 1969.