With stock prices scaling new highs and robust economic growth, Americans spent a record amount of money buying diamonds last year.

Buying diamonds US consumers now account for more than half of the world’s diamond consumption

Demand in the U.S., which now accounts for more than half of the world’s diamond consumption, rose 4.4 percent to a record $41 billion last year, top producer De Beers said in a report Friday. That helped offset contractions in China and India, where the company will be stepping up marketing to revive growth. Global demand edged higher by 0.3 percent, to $80 billion.

The U.S. has been a bright spot in the diamond industry, expanding its market share in the past six years as wage growth, job creation and a strong stock market helped boost consumption, according to De Beers. That contrasted with purchases in key growth market India, where a jewelers strike and the demonetization campaign led to a 13 percent contraction. Demand fell 10 percent in the Gulf region as oil prices remained depressed.



Improvements in demand from China and India emerging in 2017

While the U.S. drove global growth in 2016, it is increasing demand from emerging markets that is behind the last five years being the strongest on record,” said Bruce Cleaver, chief executive officer of De Beers. “Despite some markets facing challenging conditions last year, we see this trend continuing, with improvements in demand from China and India, in particular, emerging in 2017.

De Beers expects a better performance in its key Asian markets in 2017 that should lead to “marginal” growth in global demand this year.

Sentiment in oil-producing countries was poor because of the impact” of lower oil prices, Stephen Lussier, CEO of De Beers’ Forevermark, the company’s diamond brand, said Friday in an interview at Bloomberg headquarters in New York. “Demand will be subdued until we see overall economic improvement.

No similar boost as in buying diamonds to consumption of other luxury goods

In the U.S., there have been signs that President Donald Trump’s pro-business policies are failing to boost consumption of luxury goods. Last week Tiffany & Co. and Signet Jewelers Ltd. reported disappointing sales and there are concerns about the amount of rough diamonds sold by the top producers in the first quarter. Yet De Beers remains optimistic, undeterred by concerns about oversupply.

Demand for rough diamonds remains strong,” Lussier said. “There are no plans for any reduction in production targets for this year. Polished prices have been steady and are inching up marginally.

One of De Beer’s biggest challenges, however, is managing global shocks.

The world is so volatile,” Lussier said. “There’s no doubt that the volatility impacts confidence and discretionary spending.

To combat that obstacle, the company is stepping up its marketing this year and will continue its push to target couples, millennials and single women, which represent a new growth opportunity, he said.