Diamond investors should see annual returns of around 6% between now and 2020, claims a new report.
The annual Global Diamond Industry Report also says that global consumption will help the worldwide value of diamond sales rocket from £10 billion in 2011 to £17 billion a year in the next seven years.
That’s a predicted increase of 60% by the end of the decade.
This boom will be fuelled by the rising middle class in India and China, which will soon surpass the US consumption of diamonds.
The report, which is put together in conjunction with the Antwerp World Diamond Centre (AWDC), is predicting that the global demand for diamonds will soon outpace market supply.
They say this will help push up prices as demand increases, which also brings an encouraging future for the diamond industry.
Yury Spektorov, one of the report’s co-authors, said: “The fundamental forces point to a bright outlook for the diamond market. However, the global market is becoming increasingly diverse, so successful players will need to understand the changing forces in global wealth distribution, customs and consumer tastes.”
The report has a study of 5,000 diamond lovers and from those they took a closer look at the findings from the three core markets for diamonds which are the US, China and India.
America is by far the world’s biggest market for diamonds, generating around £18 billion a year and is three times bigger than the Chinese market.
Since the financial crisis in 2008, demand in the US was hit particularly hard when sales of diamond jewellery dropped by nearly 20%, but they have since rebounded and last year’s revenues were just above those generated in 2000.
Growth in China
China has moved quickly to become the second biggest diamond market in the world and now has annual sales of around £6 billion helped by an increasingly wealthy middle class.
The survey found that 90% of affluent Chinese households now have one diamond jewellery item and most have more.
The popularity of diamonds among for Chinese people on lower incomes is also growing, and this will present the diamond industry with an incredible opportunity for growth, says the report which also flags up the fact that the giving of diamond engagement rings is fast becoming popular in China.
The third biggest market for diamonds is India where revenues have now reached £5.6 billion a year and the market there continues to grow rapidly.
As in China, the making presents of diamond rings is quickly becoming popular and the survey found that around 90% of India’s rich women now own diamonds.