More than half of 35 retailers operating 130 outlets in ten South East Asian markets expect sales to increase during the second half of 2003, according to a Jewellery News Asia survey.

The effect of the outbreak of SARS across several of the region's most important jewellery markets was exacerbated by sluggish economic conditions and the outbreak of hostilities in the Middle East.

Nearly half of all suppliers recorded sales dips varying from five to 30 per cent, but there are hopes that the market is to become healthy again, following the containment of SARS in June.

With retailers planning to spend more on marketing and the South East Asian economy improving in line with that of the US, the survey reports an optimistic picture across the region.

China was only affected 'slightly' by the epidemic, and is reporting steady growth in platinum sales, thanks to effective promotion and strong demand. Relaxed tourist laws in Hong Kong have increased the hope of sales to visitors there.

Following a 15 per cent growth in sales in the first half of the year, retailers in Taiwan are planning an aggressive series of advertising campaigns.