Is New York Back as a Diamond Center?

It sure looks that way. Business is booming, and a younger generation of dealers is coming on strong (see the companion article immediately following this one). Despite its revival, though, there's still concern about the city's declining manufacturing base.

A few years back, many people in the diamond industry worried that most of New York's diamond business would go the way of the Automat and the 10-cent subway ride. Profits were sinking, De Beers was regularly skipping New York's sights, and factories were closing. Most New York dealers were middlemen, and middlemen didn't seem to have a future in the streamlined global industry that was rapidly emerging. The outlook was so gloomy that when price-sheet publisher Martin Rapaport went to a Jewelers Club luncheon and predicted that the diamond industry would lose half its members within a year, no one doubted it was true.

But a funny thing happened on the way to the shakeout:

The Far East economy …