Despite a timeless advertising slogan, the precious stone industry is finding that while they may be forever, diamonds are not recession-proof.
Like most industries, the Asian economic crisis has hit the gemstone market hard, wiping out gains brought about by the best growth for a decade in the United States market - which accounts for 40 per cent of world sales - as well as steady growth in Europe.
Things seemed to be going well in Asia. Sales were up in Hong Kong, an entrenched diamond market, even into the first quarter of this year.
Then regional sales plummeted.
In August, De Beers, the world's preeminent diamond merchants, saw a 33 per cent drop in headline earnings in the first half, down to US$334 million.
Overall industry sales fell 39 per cent compared with record sales in the first half of last year, translating into $2.88 billion. Worse is expected in the second half.
