SIC 3915
JEWELERS' FINDINGS AND MATERIALS, AND LAPIDARY WORK



This category covers establishments primarily engaged in manufacturing unassembled jewelry parts and stock jewelers' materials such as wire, tubing, and sheeting; and establishments of lapidaries primarily engaged in cutting, slabbing, tumbling, carving, engraving, polishing, or faceting stones from natural or manmade precious or semiprecious gem raw materials, either for sale or on a contract basis for the trade; in recutting, repolishing, and setting gem stones; or in drilling, cutting, or otherwise preparing jewels for instruments, dies, watches, chronometers, and other industrial uses. This industry includes the drilling, sawing, and peeling of real or cultured pearls. Establishments primarily engaged in manufacturing synthetic stones for gemstones and industrial uses are classified SIC 3299: Nonmetallic Mineral Products, Not Elsewhere Classified, and those manufacturing artificial pearls are classified in SIC 3961: Costume Jewelry and Costume Novelties, Except Precious Metal.

NAICS Code(s)

339913 (Jeweler's Material and Lapidary Work Manufacturing)

Organization and Structure

The approximately 400 establishments in this industry produced roughly $817 million in shipments in 2000. Precious metal finding accounted for more than half of this total.

Production in this industry is centered in New England. The six main states producing jewelers' findings and lapidary work were Rhode Island, Massachusetts, New Jersey, California, New York, and Florida. Together, these states accounted for roughly 50 percent of total U.S. output in this industry.

Background and Development

The largest diamond in existence is the Cullinan, which was discovered in 1905. The Cullinan weighed 3,106 carats (about 1.4 pounds) before it was cut into 105 distinct gems totaling almost 1,100 carats. The Star of Africa (named for the Cullinan's place of discovery, the Premier Mine in Transvaal State in South Africa) was given to King Edward VII of Great Britain and set in the Royal Scepter, one of the British Crown Jewels. The Star of Africa weighs 530.2 carats. The Great Mogul diamond of 240 carats has vanished since its existence was originally reported in 1665; the Kohinoor Diamond (106 carats and also a part of the British Crown Jewels) may have been part of the Mogul. Other famous single diamonds are the Vargas diamond found in Brazil in 1938 and the Jonker and Lesotho diamonds, also products of African mines.

Diamond cutting takes careful planning and entails a certain amount of risk. Shape and surface problems mean choosing between the largest cut diamond with flaws or the second largest but perfectly finished diamond. Marvin Samuels of Premier Gem Corp. of New York spent four years planning the cutting of what could have been the largest finished diamond in the world, topping the Cullinan. Samuels chose perfect cutting over size, finishing the cutting in early 1988 with a stone weighing 407.43 carats.

The jewelry industry in general suffered with the economic downturn of the late 1980s. One-carat diamonds once valued at $60,000 sold for $12,000. Bankruptcies, closings, and reorganizations sent shock waves through the industry. Many unsecured manufacturers and suppliers in the findings and lapidary segment toppled. That trend was aggravated by a 10 percent federal luxury tax on jewelry over $10,000, though the tax affected only a small portion of the industry. This luxury tax was repealed in 1993.

The worldwide downturn depressed prices on many gems along with gold and silver, but the DeBeers' Central Selling Organization restricted the supply of diamonds along with sapphires, emeralds, and rubies to keep prices up. By 1986, it was supporting diamond sales in the United States with a $35 million advertising campaign. Even so, worldwide downsizing continued. In Antwerp, where diamonds make up 6 percent of Belgium's imports and exports, the number of diamond workers dropped from more than 19,000 in the 1970s to around 7,500 by 1986. Much of the polishing and grinding business traditionally commanded by Antwerp went to lower cost shops in Bombay, India.

Current Conditions

By 1999, manufacturers were anticipating the beginning of the twenty-first century as the time when baby boomers would reach their mature years and spend more of their discretionary income on jewelry and gemstones. Jewelry retailing grew by 6 to 7 percent per year in the late 1990s, and the manufacturing end of the trade was naturally closely related. Total industry shipments increased from $737 million in 1998 to $817 million in 2000. However, employment over this time period declined from 5,503 to 5,251. Production workers in 2000 totaled 3,747; they earned an average wage of $11.89 per hour.

In the late 1990s, light-colored gemstones like tanzanite grew in popularity. The interest in the possible healing and life-enhancing effects of various semiprecious stones and crystals is stimulating growth in sales of gemstone bracelets, pins, and pendants, and is also increasing many hobbyists' interest in lapidary work. Shows sponsored by the Lapidary Dealers' Association and the American Gem Trade Association are experiencing record attendance as hobbyists and small dealers seek new enhancements, treatments, and findings and unique gems, synthetic or otherwise. Ancient Roman glass has become a popular "gem" because of its brilliant colors. Popular trends in gemstones include the following: spessartite gems, which are bright yellow to orange garnets from Namibia; vivid green stones of chrome diopside (mined in Siberia) and demantoid (also from Russia and Mexico); rhodolites mined in Tanzania that range in color from browns to reds and purples; and Oregon sunstone, in which carving enhances the luster of the metallic red stones. Synthetic rubies, sapphires, citrines, ametrines, amethysts, and chemical synthetics like cubic zirconia are popular among individual buyers but are causing alarm among wholesalers because large-scale substitutions have been discovered among some wholesale lots.

Eighty percent of the world's diamonds are produced in the countries of Botswana, Russia, South Africa, Angola, Namibia, Australia, and Zaire (in descending order). Botswana boasts the world's largest diamond mine, but Canada is positioned to become a world leader because of the BHP-Dai Met joint venture mine that will generate 3 million carats of diamonds annually after the deposit is fully explored and functioning as a mine. In the late 1990s, only 21 operating mines produced all of the world's diamonds, with many other deposits under development. Australia and Russia are the countries with the largest reserves of diamonds, although Russian exports have been heavily hampered by the country's evolving economic system and government operations. Almazy Rossii-Sakha is Russia's largest producer, and it provides the South African giant De Beers with $550 million in rough diamonds per year through an agreement extended to the end of 2001.

Industry Leaders

The Central Selling Organization (CSO) of De Beers Consolidated Mines, Ltd., markets over 70 percent of the rough-cut diamonds in the world, as of 1998. The CSO ships rough-cut diamonds to diamond-cutting centers in New York, Antwerp, Tel Aviv, and Bombay. Bombay has remained the cutting capital of the world since the 1980s because of the low labor costs. Economic conditions in Asia in 1997-1998 caused sales of diamonds to decline, which resulted in an oversupply. CSO's diamond sales for the first half of 1998 totaled only $1.7 billion, a drop of 41 percent from the first half of 1997 and the lowest half-year total in 10 years. De Beers' marketing of diamonds as gifts worthy of commemorating the millennium was calculated to increase worldwide diamond demand. De Beers is considering adding minute identification numbers on its gemstones by laser drilling to boost consumer confidence in real diamonds over cubic zirconium or moissanite substitutes.

Further Reading

Darnay, Arsen J., ed. Manufacturing USA. 5th ed. Farmington Hills, MI: Gale Group, 1996.

Roskin, Gary. "New & Hot in Tucson." Jewelers Circular Keystone , April 1998.

U.S. Bureau of the Census. 1992 Census of Manufactures. Washington: GPO, 1995.

——. 1995 Annual Survey of Manufactures. Washington: GPO, 1997.

——. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

Zimmerman, R., et al. "Jewelry Sector Update." The Jewelry Industry Report , Janney Montgomery Scott, Inc., 25 August 1999.

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