Rapaport Magazine

Economic Bulletin

Consumer Confidence Continues Plunge

By Rapaport
RAPAPORT... The Conference Board Consumer Confidence Index now stands at a five-year low at 64.5 for March, a drop from 76.4 in the previous month. Consumers’ opinions of current conditions weakened, with the Present Situation Index decreasing to 89.2 from 104 in February. Those describing business conditions as “bad” increased to 25.4 percent from 21.3 percent, while those claiming business conditions are “good” declined to 15.4 percent from 19.1 percent. Consumers saying jobs are “hard to get” rose to 25.1 percent from 23.4 percent, while those claiming jobs are “plentiful” decreased to 18.8 percent from 21.5 percent.

The Expectations Index also declined to 47.9 from 58, which represents a 35-year low not seen since December 1973 during the oil embargo and Watergate. Consumers who feel business conditions will worsen over the next six months increased to 25.4 percent from 21.6 percent, while those anticipating business conditions will improve declined to 8.1 percent from 9.7 percent in February. The outlook for the labor market also sank. Consumers expecting fewer jobs in the months ahead increased to 29 percent from 28 percent, while those anticipating more jobs decreased to 7.7 percent from 8.9 percent. The proportion of consumers expecting their incomes to increase declined to 14.9 percent from 18 percent. The Consumer Confidence Survey, conducted for the Conference Board by Taylor Nelson Sofres (TNS), is based on a representative sample of 5,000 U.S. households.

U.S. Polished Imports Up
Polished diamond imports to the United States rose 4 percent to nearly $1.5 billion in January 2008, compared to January 2007. Polished imports fell 19 percent to 1.13 million carats, as their average price increased 28 percent to $1,322 per carat. Polished exports jumped 39 percent to about $1.1 billion, causing net polished imports — polished imports less exports — to decline 39 percent to $399 million. Rough imports grew 23 percent to $75 million, and rough exports fell 8 percent to $47 million. Net rough imports — imports minus exports — climbed 180 percent to $28 million. The United States began 2008 with its net diamond account — net polished imports plus net rough imports — down 35 percent.

India’s Polished Imports Spike
India’s polished diamond exports grew 50 percent to $1.3 billion in February 2008 compared to a year earlier, the Gem and Jewellery Export Promotion Council (GJEPC) reported. However, polished imports jumped 221 percent to $547.1 million, causing net polished exports — polished exports less imports — to rise 10 percent to $792.98 million. By volume, polished exports increased 25 percent to 3.4 million carats, as average export prices rose 20 percent to $394.15 per carat. Rough imports in February grew 32 percent to $926.45 million and 16 percent by volume to 15.66 million carats. The average price of India’s February rough imports rose 13 percent to $59.14 per carat. The country’s net rough imports — imports minus exports — increased 30 percent to $866.08 million. India’s net diamond account — net polished exports less net rough imports — for the month decreased to negative $73.1 million, compared with a positive $54.48 million one year ago.

For the year to date, polished exports rose 8 percent to $5.08 billion, while polished imports jumped 192 percent to $2.05 billion. Net polished exports fell 25 percent to $3.03 billion. Rough imports for January and February declined 3 percent to $3.55 billion, and rough exports dropped 39 percent to $175.93 million. Net rough imports for the two months were flat at $3.37 billion. India’s net diamond account was $344.10 million in the red, compared with $638.03 million from January to February 2007.

Belgium’s Polished Exports Up
Belgium’s polished exports grew 39 percent to $1.19 billion in February 2008, the Antwerp World Diamond Centre (AWDC) reported. Polished exports rose 5 percent to 857,674.17 carats, while average prices increased 32 percent to $1,391.65 per carat. Polished imports increased 22 percent to $871.89 million, causing Belgium’s net polished exports — exports less imports — to more than double to $321.89 million for the month. Although February rough imports grew 6 percent to $961.02 million, volume decreased 21 percent to 10 million carats. Rough exports grew 20 percent to $1.13 billion, but Belgium’s net rough — rough imports less exports — held negative at $164.38 million. Belgium’s net diamond account — net polished exports less net rough imports — was at $486.28 million, compared with $173.59 million in February 2007. For the year to date, polished exports rose 30 percent to $2.1 billion. Net polished exports fell 17 percent to $170.23 million for January through February. Rough imports during the two months rose 16 percent to $2.02 billion, while rough exports grew 13 percent to $2.15 billion. Net rough imports increased 18 percent to negative $137.55 million. Belgium’s net diamond account for the first two months of 2008 fell 2 percent to $307.79 million.

Japan’s Polished Imports Down
Japan’s polished diamond imports fell 2.1 percent to $66.2 million in February, according to figures posted by the J Club. Japan imported 167,194 carats of polished during the month, 2 percent less than February 2007. Imports from India, the country’s largest source of polished, dropped 15 percent to $26.3 million, while those from Belgium rose 38.2 percent to $19.1 million and Israel declined 7.1 percent to $7.2 million. Japan’s gold jewelry imports rose 30.5 percent to $69.5 million in February and 10.6 percent to $132.8 million for the year to date. Platinum jewelry imports increased 24.4 percent to $37.9 million for the month. Japan’s silver jewelry imports were flat at $18.2 million.

Suashish Diamonds Profits Soar
Suashish Diamonds profits more than tripled in its third fiscal quarter ended December 31, 2007, rising 332 percent to approximately $7.2 million (INR 290.9 million), according to figures posted on the Bombay Stock Exchange (BSE). Sales for the period rose 3.2 percent to $85.9 million (INR 3.5 billion). Operating profit and profits before depreciation and taxes increased 265 percent to $8.9 million (INR 358.5 million). The company’s equity capital stood at $5.1 million (INR 207.6 million).

UAE Polished Diamond Trade Surges
The United Arab Emirates’ (UAE) polished diamond trade — imports plus exports — grew 88 percent to $6.41 billion in 2007, boosted by soaring business with India, the Dubai Diamond Exchange (DDE) reported. Polished imports grew 73 percent to $3.67 billion in 2007 or 13.68 million carats, an increase of 53 percent for the year. India accounted for nearly two-thirds of the UAE’s total imports at $2.34 billion, up 88 percent from 2006, while Belgium was the second-largest supplier of polished at $630.02 million, followed by Hong Kong at $223.67 million and the United States at $172.61 million. The UAE’s polished exports rose 115 percent to $2.73 billion in 2007, spurred by a 192 percent increase in exports to India at $1.63 billion. The UAE’s next biggest export destinations were Belgium at $336.89 million, Hong Kong at $227.36 million and Switzerland at $201.31 million. The DDE stated that the UAE’s 2007 rough diamond imports grew 28 percent to $2 billion, and that rough exports rose by 19 percent to $2.83 billion. Total diamond trade for the year — polished and rough, imports and exports — grew 53 percent to $11.23 billion, according to the DDE.

Article from the Rapaport Magazine - April 2008. To subscribe click here.

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