Italy’s hopes for recovery of the jewelry sector slip to 2008
VICENZA – Italy’s once-dominant jewelry industry, now struggling with lower-cost countries, won’t pick up market share at least until next year, an industry expert said. Still the world leader in jewelry design, Italy is only third largest in terms of jewelry output behind India and China, with Turkey snapping at its heels. Earlier this year Italian jewelers, encouraged by signs of revived consumer interest, expected the multi-billion euro sector to stop shrinking in 2007, but continued gold price jitters and a strong euro have dashed such hopes. «I am very skeptical about a reversal of negative trend in 2007. I see volumes falling again, maybe less than in 2006, with a possibility of potential recovery in 2008,» said Stefano de Pascale, director of Italy’s goldsmiths’ association Federorafi. Italian jewelry output fell 21 percent in 2006 to just under 218 tons – a 60 percent drop from the 1998 heyday – with China overtaking Italy as the world’s No 2 jewelrymaker, according to data from precious metals consultancy GFMS. Italian exports, about 75 percent of all output, have long been under pressure as the strong euro made them too expensive on the key US market against the cheaper jewelry from India, China and Turkey. The total value of Italian jewelry exports rose 9.7 percent to -4.4 billion ($5.96 billion) last year, official data showed. But that figure was boosted by the soaring gold price and actually masked an 11 percent fall in volume, Federorafi’s de Pascale told Reuters on Tuesday, adding that volumes may drop again this year if the strong euro continued to hurt European exports. Currency factor «The euro/dollar rate remains a big unknown factor this year,» de Pascale said in an interview at an international jewelry fair in Vicenza, northern Italy. Italian jewelry exports rose 3-4 percent in value in the first two months of this year, indicating a slowdown and a further decline in volumes, according to data from Vicenza Fair based on estimates from research center ASI. De Pascale said Italian goldsmiths are pressing the European Union to seek a reduction in US duties on imports of precious metals products from Europe, which have cut Italian sales in the United States in recent years. Italian jewelry exports to the United States rose 5.5 percent to -878 million in 2006 and accounted for just under 20 percent of total Italian jewelry exports last year, Vicenza Fair said, based on data from Italian statistics agency ISTAT. But it was a far cry from the -1.2 billion US sales a few years ago, when about a quarter of all Italian jewelry exports was sold in the United States, de Pascale said. Some important American buyers have returned to the fair in 2007 after years of absence, but it remained to be seen if renewed contacts would translate into new orders, he said. The domestic jewelry market has been stagnating for years hurt by weak consumer demand and an inefficient retail system, which Italian goldsmiths have long been trying to change, de Pascale said, echoing concerns of many jewelers at the fair.
