If that message still holds true, then the natural diamond industry should be in rude health. After all, during the last 20 years global GDP has increased by 160%, a CAGR (compound annual growth rate) of five percent and personal luxury goods sales have risen by a CAGR of 5.6%. Jewellery sales by luxury conglomerate Richemont increased almost sevenfold, a stunning CAGR in excess of 10%.
Except by comparison the performance of the natural diamond industry has been dire. Over that same period, diamond jewellery sales have risen at a CAGR of just 1.3% but in real terms they have fallen by around 22% and the value of the polished diamonds sold in jewellery has grown at a CAGR of one percent, a fall in real terms of 26%. Even diamond jewellery sales in the largest market, America, grew by a CAGR of just two percent, which in real terms equates to diamond consumption falling by 6% over that period. Polished prices at the end of last year were 16% below 2003 prices; in inflation adjusted terms, they were 50% lower. The industry has failed to tell its own story and because of the cannibalisation of sales from lab-grown diamonds, it is also in oversupply, Its very future is by no means certain. These are the unpalatable facts that the industry ignores at its peril.
