Affluent consumers show optimism for spending and the economy in new survey.
In contrast to the March general Consumer Confidence Index of The Conference Board, which fell over 10% to the low levels last seen in Fall 2010, the affluent, who account for about half of all consumer spending, report a better outlook for the economy and their personal spending plans Spring 2011 survey by the American Affluence Research Center.
Spending plans for all 17 products and services tracked by these twice-yearly surveys of the wealthiest 10% of US households are much stronger than in the Fall 2010 survey. There is also improvement in the plans to make major expenditures such as for a new auto, a cruise, and a vacation home. These results are consistent with reported sales during the first quarter of 2011.
Given the 11.4 million households represented by this survey, it can be estimated that the market segment represents potential purchases during the next 12 months of 2.4 million autos, 1.5 million home remodeling projects, 1.7 million cruise buyers (total of 3.4 million cruisers), 422,000 vacation homes, and 536,000 primary residences.
Men, those with a $6M+ net worth, and those under age 50 are the most likely to plan the acquisition of one or more of the 8 major expenditures listed. Most of the items have relatively large variations within age, income, and net worth segments. Reflecting a substantial amount of possible additional purchases, the “undecideds” or “don’t know” respondents are relatively numerous for autos (10%), cruises (8%), remodeling (5%), acquisition of a primary residence (4.1%), and acquisition of a vacation home (5.4%).
In 16 of the 17 categories, two-thirds or more plan to spend the same or more during the next 12 months. There were 12 such categories in the Fall 2010 survey.
Participants in the American Affluence Research Center survey have an average annual household income of $333,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.
For additional highlights of the survey, please visit:
Ron Kurtz
American Affluence Research Center, 770-740-2200