In its fourth annual report on the global diamond industry, Bain & Company forecasts a solid outlook for diamond demand, but cautions that access to diamond financing, particularly for the middle market, could hamper future market growth.
The rollercoaster trajectory of the diamond market in recent years showed signs of moderating in 2013, with a 2 percent to 4 percent growth at every point along the value chain. Looking ahead to the next decade, the outlook should remain strong, as long as the industry can step up its focus on driving demand and sustaining a positive image for the market. However, macroeconomic uncertainties, coupled with industry challenges, including dwindling access to financing – one of the biggest hurdles facing the diamond value chain’s middle market – could impact future growth; this according to the fourth annual global diamond industry report, “Diamonds: Timeless Gems in a Changing World,” developed by Bain & Company and the Antwerp World Diamond Centre (AWDC).
Bain’s research found the diamond industry’s growth last year was centered primarily in the U.S., China and India. The U.S. reconfirmed its position as the world’s leading diamond retail market, powered by economic growth of approximately 2 percent – a big improvement from the 1.6 percent decline posted during and immediately after the global financial crisis. Meanwhile, India and China continued to dominate the cutting and polishing and jewelry manufacturing sectors, respectively.
Despite the industry’s rebound, persistent macroeconomic uncertainties are spurring questions around diamond demand dynamics in these markets and worldwide.
“The economic peaks and valleys that the global diamond market experienced over the last few years are steady, at least for the time being, but the industry cannot afford to get too comfortable,” said Olya Linde, the lead author of the global diamond industry report and a Bain partner. “Macroeconomics, along with other factors – financing, marketing challenges, undisclosed synthetic diamonds, environmental concerns, social awareness, and even country-specific preferences – stand in the way of an easy, straight path to sustained diamond industry growth over the long-term.”
Bain anticipates that beginning in 2019 the global diamond market is poised to experience a widening gap of up to 5 to 6 percentage points, due to dwindling diamond supply and increased demand led by expanding wealth and a growing middle class in developed and developing countries alike.
Please find the complete study at : Diamonds: Timeless gems in a changing world
