Jewelry, Precious Metal

The precious metal jewelry industry encompasses retailers, wholesalers, manufacturers, and suppliers, including lapidaries, refiners, stone dealers, findings manufacturers (manufacturers of the small parts used in making jewelry, such as clasps and other items), and subcontractors who provide services such as polishing and electroplating. Manufacturing firms in the precious metal jewelry industry tend to be small establishments and are concentrated in the New York City area. The industry's major expenses are the costs of raw materials and highly skilled workers. Manufacturers face steadily rising costs in precious metals, especially diamonds.

In 2007, there were 1,659 manufacturers of precious metal jewelry in an industry with 27,442 employees. The U.S. had 15 percent of the worldwide sales in this category. The value of shipments grew from $5.26 billion in 1998 to $7.8 billion in 2008.

Two major issues of concern to the precious metal jewelry industry in the 2000s were supplies and environmental regulations related to manufacturing processes. The volatile precious metals market was evident in 2006, when gold, platinum, and palladium prices reached near-record highs. In addition, the challenge of finding new diamond mines and making them operational quickly and economically was a major issue. Regulations concerning the removal of toxic levels of metals used in electroplating added financial burdens to many manufacturers and subcontractors. In the mid-2000s, going "green" became a trend in the industry, as some manufacturers promoted jewelry lines made from recycled metals.

The main markets for U.S. exports of precious metal jewelry were Switzerland, Japan, and Thailand. In the late 1990s, the United States was Japan's fourth-largest overseas supplier of jewelry, with 15.3 percent of its import market, following Hong Kong (23.1 percent), Italy (18.8 percent), and Thailand (17.1 percent), and leading France (8.6 percent). Asia was expected to be the biggest consumer of U.S.-manufactured jewelry from 2007 through 2015. As with most manufacturing industry segments, the jewelry and precious metal industry maintained a trade deficit, with imports totaling $8.5 billion versus exports totaling $6.4 billion.

Technology, in the form of various computerized systems, affects the jewelry industry. The use of CAD/CAM (computer-aided design and manufacturing) to design and automate steps in mold and model making has become an industry standard. Some jewelers use computers to design and create customized pieces according to their customers' wishes. With the aid of computers, customers visualize different combination of styles, cuts, shanks, and stones to create their own pieces.

Two of the leading suppliers, LID US and M. Fabrikant & Sons Inc., were involved in jewelry manufacturing. Both companies filed for Chapter 11 bankruptcy relief within months of each other in late 2006 and early 2007.