Economic Bulletin

RAPAPORT...

Consumer Spending, GDP Drop
U.S. consumer spending shrank by 0.2 percent in March and incomes, reflecting the continued wave of layoffs, dropped by 0.3 percent, according to the Commerce Department.This spending decrease followed two consecutive monthly increases.

In the first quarter of the year, consumer spending grew at a 2.2 percent annual rate after two consecutive quarters of declines. A price gauge tied to consumer spending, the personal consumption expenditures (PCE) price index, excluding food and energy, showed a 0.2 percent uptick.
The overall economy, as measured by the gross domestic product (GDP), fell at an annual rate of 6.1 percent in the first three months of 2009, after a 6.3 percent plunge in the fourth quarter, the Commerce Department reported. This marked the worst back-to-back GDP declines in half a century.


U.S.’s Polished Diamond Imports Decline
Polished imports to the U.S. fell 53 percent to $837.2 million in March 2009 compared with the previous year. By volume, imports declined 37 percent to 753,983 carats as average prices dropped 25 percent from one year ago to $1,110.34 per carat. Polished exports sank 42 percent to $727.4 million and net polished imports, the extent to which imports exceeded exports, slumped 79 percent to $109.8 million.

Rough imports to the U.S. decreased 69 percent to $19.3 million in March, while rough exports fell 73 percent to $11 million. Net rough imports declined 62 percent to $8.3 million. The U.S. net diamond account, measuring total imports less total exports, dropped 78 percent to $118.1 million.

The first quarter of 2009 saw U.S. polished imports down 52 percent to $2.4 billion, with imports declining 41 percent by volume to 2,065,454 carats. Polished exports dropped 44 percent to $2 million, as net polished imports sank 72 percent to $371.4 million. Rough imports for the year to date decreased 81 percent to $39.4 million, while rough exports fell 75 percent to $31.4 million.


India’s Polished Exports Tumble
India’s polished exports dropped 38 percent to $765.6 million in the month of April 2009, while polished imports decreased 34 percent to $427.9 million compared with April 2008, according to the Gem & Jewellery Export Promotion Council (GJEPC). Rough imports were down 54 percent to $458 million and rough exports sank 52 percent to $50.1 million.

India’s polished exports for the calendar year to date fell 34 percent to $3.5 billion and polished imports dropped 16 percent to $2 billion. Rough imports were down 66 percent to $1.2 billion and rough exports declined 23 percent to $215 million, giving India $982 million in net rough imports, a 70 percent drop from one year ago.


Belgium’s Polished Exports Plunge
Belgium’s polished diamond exports fell 46 percent year-over-year to $599.4 million in April, according to data released by the Antwerp World Diamond Centre (AWDC). Polished imports declined 43 percent to $668.1 million for the month and net polished exports, measuring the extent to which exports exceeded imports, dropped 13 percent to a deficit of $68.7 million for the month.

Belgium’s rough imports decreased 58 percent to $399 million, while exports fell 37 percent to $609.8 million. Net rough imports — rough imports less exports — widened their deficit for the month to $210.8 million from negative $21.2 million a year earlier.


Israel’s Polished Exports Slide
Israel’s polished diamond exports fell 28 percent to $269.1 million in April compared to the previous year, according to data published by the Central Bureau of Statistics (CBS). Rough exports dropped 59 percent to $108.3 million in April.

The country’s total diamond exports of rough and polished combined fell 41 percent to $377.4 million in April. Total imports declined 62 percent to $302.3 million. CBS did not provide separate rough and polished import data. Israel’s net diamond account, representing the extent to which total diamond exports exceeded imports, stood at $75.1 million in April, compared with a deficit of $146.5 million in April 2008.

During the first four months of the year, Israel’s polished exports decreased 52 percent to $1.2 billion, while rough exports dropped 68 percent to $435.3 million. Total exports fell 58 percent to $1.6 billion, and total imports declined 69 percent to $992.1 million.


China Turns to Local Jewelry Market
China’s jewelry exports grew 4 percent in 2008, in contrast with 17 percent growth in 2007, due to faltering demand overseas, according to the latest statistics, SinoCast reported. However, the country has its own local market. China’s Ministry of Commerce recently estimated that China, now the world’s fourth-largest diamond-consuming nation, will be the largest luxury goods market by 2015, with 23 percent of the world’s total, SinoCast reported.*


Japan’s Polished Imports Fall
Japan’s polished diamond imports decreased 21 percent in March 2009 to $59.3 million, according to data published by The J Club based on statistics from the Customs Bureau of the country’s Finance Ministry. Imports rose 26 percent year-over-year by volume to 217,956 carats as the price per carat dropped 37 percent to $272.

Diamond imports from all of Japan’s major sources declined during the month — except for Hong Kong, which increased 88 percent to $10.5 million. Imports from India were down 15 percent to $22.5 million, imports from Belgium sank 41 percent to $11.1 million and those from Israel decreased by 34 percent to $6.5 million. During the first quarter of the year, Japan’s total diamond imports fell 19 percent to $174.3 million, but they were up 7 percent in terms of volume to 508,577 carats.

Japan’s gold jewelry imports dropped 37 percent in March to $51.5 million and decreased by 35 percent to $138.9 million during the first three months of the year. Platinum jewelry imports declined 31 percent to $35.9 million in March and by 26 percent to $89.7 million for the year to date. Silver jewelry imports were down 19 percent to $16.3 million during the month, while imports of jewelry made from other precious metals grew nearly sevenfold to $1.7 million.


Abu Dhabi’s Gold Sales Jump
The volume of retail gold jewelry sales rose 25 to 30 percent in Abu Dhabi in April as lower prices and the Indian wedding season brought buyers back to the market, Tushar Patni, chairman of Abu Dhabi Gold and Jewellery Group, told Reuters, ADP News reported. Sales volumes of jewelry and gold bars dropped 20 percent in the first quarter of 2009, compared with the same period last year.

April and May are traditionally the peak months for weddings in India and Indians are among the largest group of expatriates in the United Arab Emirates (UAE). Abu Dhabi’s retail gold sales are slowest from June to August, when expatriates leave on summer vacations.*


Hong Kong’s Polished Imports Total $825 Million
Hong Kong’s polished diamond imports totaled $825.6 million in March, according to the Diamond Federation of Hong Kong (DFHK). Net polished imports, polished imports less polished exports and re-exports, came to $122 million. For the year to date, polished imports were almost $2.2 billion, with net polished imports at $418.9 million.

Rough imports totaled $59.3 million during the month and rough exports were $47.8 million. For the year-to-date, rough imports came to $160.9 million and exports were $166.1 million.


Charles & Colvard’s Sales Sag
Charles & Colvard’s sales in the first quarter dropped 27 percent compared to the previous year to $2.5 million. The moissanite provider reported a net loss of more than $1 million, or 6 cents per diluted share, compared with a loss of $698,085 one year ago.

Charles & Colvard’s sales in the U.S. fell 29 percent to $1.7 million in the first quarter. The firm’s average selling price per carat decreased 13 percent from one year ago “due to a special pricing promotion offered to our customers during the first quarter of 2009,” the company reported.

*Additional reporting by Acquire Media.

Article from the Rapaport Magazine - June 2009. To subscribe click here.