Strong demand from the US, which saw diamond jewellery sales in 2016 rise by 4.4% to cross US$ 40 billion for the first time ever, was the key to a very marginal rise in global sales of diamond jewellery during the year, the De Beers Group reported while releasing its annual industry insight data for 2016 on June 2.

The rise in the US offset a contraction in demand in India, where demand dropped by 8.8% in local currency terms as purchases of diamond jewellery were affected by the jewellers strike and demonetisation, De Beers said.

China saw a marginal 0.6% rise in demand, and Japan saw a 2.9% decline, both in local currency terms, while the Gulf was impacted by a challenging macro-economic environment, driven by continued oil price weakness, the data showed.

The US has recorded five years of consecutive demand growth, and US consumers now account for roughly half of all diamond jewellery purchases globally – a level not seen since before the financial crisis, De Beers stated.

It also drew attention to some changes in the pattern of US demand, pointing out that while bridal diamond jewellery continues to be the foundation, more frequent acquisitions and a higher value of spend from single women were also important drivers, even as self-purchase trends increased among both single and married women.

Fifty-seven per cent of self-purchased diamond jewellery is acquired by married women, while a third is from Millennials. Retailers also reported high levels of consumer interest for multi-diamond pieces, the data revealed.

The data showed that consumers are spending more per piece on diamond jewellery, with retailers reporting an increase in the US$1,000 to US$4,999 category.

However, slower US GDP growth in the first quarter of 2017 is likely to have impacted diamond jewellery demand in the short term, De Beers noted. The data also revealed that demand from Indian consumers started to return to more normal levels in 2017, while demand from Chinese consumers has continued to improve in early 2017, with robust sales around Chinese New Year contributing to the positive performance in the first quarter.

De Beers projects that further marginal global growth in diamond jewellery demand (in US dollar terms) is likely in 2017.

Bruce Cleaver, CEO, De Beers Group, said: “American consumers continue to express strong desire for diamonds, but their purchasing habits are changing rapidly. However, while US demand drove global growth in 2016, it is increasing demand from emerging markets that is behind the last five years being the strongest on record. 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.”