(IDEX Online News) – New government data has boosted the size of the U.S. jewelry industry by about 5 percent, restoring it to its former level of $65 million in the peak sales year of 2007.

 

The full analysis is available to IDEX Online Research subscribers and IDEX Online members here.

 

In the heady pre-recession years earlier in the past decade, the U.S. Department of Commerce made only minor revisions to its annual jewelry industry sales estimates. For most of the past decade, the government said that the total American jewelry market was a $65 billion industry, based on annual sales levels.

 

In 2009, the Commerce Department made a major database revision – amending sales data back to 1993 – which showed that the U.S. jewelry industry was smaller than previously reported: it was pegged at about $62 billion, a peak it reached in 2007. Further, in subsequent reports, the government reported that jewelry sales during the Great Recession of 2008-2009 fell by only about 5 percent peak-to-valley.

 

With its latest industry sales database revision in early August, the Commerce Department has restored the U.S. jewelry industry to its former pinnacle of $65 billion, a level reached in 2007. New data also shows that jewelry sales declined far more than previously reported during the Great Recession of 2008-2009: sales were down by about 11 percent peak-to-valley, and it has been slower to recover than earlier data indicated.

 

The revised jewelry sales data from the Commerce Department sheds new light on jewelry demand during the Great Recession of 2008-2009, as well as the recovery period of 2010 and early 2011, including the following:

 

·        At its peak in 2007, U.S. jewelry sales reached a record level of $65 billion, an upward revision of just over $3 billion from earlier data.

 

·        Jewelry sales in 2010 were revised downward by nearly $2 billion to just over $61 billion, indicating that the jewelry industry has not yet recovered to pre-recession sales levels. Earlier data – now restated by the government – showed that 2010 was a record sales year; this is no longer correct.

 

·        Peak-to-valley, U.S. jewelry sales fell by 11 percent in the Great Recession. This was more than double the decline, based on prior government data.

 

·        Watch sales represent just over 13 percent of total jewelry and watch industry sales. Prior data pegged the watch sales mix at about 11 percent of total industry sales.

 

·        Specialty jewelers generate just over 43 percent of the industry’s total U.S. sales, up slightly from 42 percent based on prior data. However, the long-term trend shows that specialty jewelers are continuing to lose market share to other retail merchants who sell jewelry.

 

·        There is a near perfect correlation between recessionary environments and specialty jewelers’ loss of market share: when the economy slows, specialty jewelers lose market share, which they never seem to regain.

 

·        The U.S. jewelry industry consumes just under half of all jewelry sold in the global market. Early estimates for 2010 suggest that the global jewelry industry is about $145 billion in size, down from $150 billion in pre-recession 2007.

 

·        Jewelry’s share of wallet is relatively unchanged, despite the major revision in jewelry sales. Why? Personal consumption expenditures were also revised upward, so the ratio of jewelry sales to personal consumption expenditures remains about the same. However, it is important to note that jewelry share of wallet has declined modestly over the past decade.

 

The following graph illustrates the differences between “old” data (blue columns) and the “new” revised data (red columns) for U.S. jewelry sales. Clearly, there was more volatility in jewelry sales during the recession of 2008-2009 than had been previously reported.  

Source: US Dept of Commerce

The full June sales analysis and statistics is available to IDEX Online Research subscribers and IDEX Online members here. Click here for more information on how to subscribe or become a member.