Italy jewellery exports seen down

Jewellery exports from Italy, Europe's top producer and exporter, are expected to fall about 10 percent in volume in 2011 as surging gold prices and global economic uncertainty hit consumer demand, senior industry officials said. Gold prices have stormed a series of record highs this year, gaining about 30 percent, as weakened economy in major countries and concerns over Europe's sovereign debt crisis spurred investment in perceived safe-haven assets.
"This is going to be another difficult year... We keep getting negative news about economic uncertainties and gold prices," Stefano de Pascale, director of the Italian goldsmiths' federation Federorafi, told Reuters on Saturday. "We are afraid there will be a fall in export volumes of about 10 percent," de Pascale said in an interview at an international jewellery trade fair.
Italy's jewellery export volumes fell 11-12 percent last year, according to Federorafi's estimates. Italy sells about 70 percent of its jewellery production abroad. Jewellery manufacturing demand for gold - one of the main drivers on world precious metals markets - is expected to fall again in Italy this year as jewellers adjust output to sluggish demand, de Pascale said. Italy used to dominate global jewellery markets, but its market shares fell in the past few years due to increased competition from China, India and Turkey. The 2008/09 global economic crisis also dealt a heavy blow.
Encouraged by signs of a pickup in consumer demand earlier this year, Italian jewellers hoped to see a start of slow sector recovery in 2011. But deteriorating economic situation on the domestic and main export markets has nipped such hopes in the bud, de Pascale said. Italian jewellery export rose 1.1 percent in tonnage and jumped 17.3 percent in value in the first four months of this year compared to the same period of 2010, organisers of Vicenza's international jewellery fair said.
Licia Mattioli, Federorafi chairman, said the figures were inflated by soaring precious metal prices and by inclusion of bijouterie, while volumes of "real jewellery" made of precious metals and stones fell with low and medium segments of the market hit particularly hard by weakened consumer demand.
"Consumer buying power is a real problem. Consumers in many European countries have become poorer the medium segment of the market is disappearing for gold jewellery," Mattioli told Reuters at the fair. "People are terrified by this gold rally," she said. Facing sluggish demand at home and on main western markets, Italian jewellers, as well as their rivals, are pinning export growth hopes on emerging markets, especially on Brazil, Russia, China and India, known as BRICs, Federorafi officials said.