Spending spree forecast for homes, cars and restaurant meals
Americans’ penny-pinching is over, as the tightwad ways of the economic downturn make way for big-spender behavior, according to a new report from Santa Monica-based research group IBISWorld.
Nearly five years after the recession began, consumers are tired of cooking at home, residing in cheaper and older homes and driving leased vehicles, according to IBISWorld.
Though economic momentum is sluggish, the unemployment rate has fallen to 8.3% from more than 10% in 2009. Consumer sentiment and disposable income levels are gradually increasing.
Big-ticket items were neglected as struggling buyers scaled back. Home-builders’ revenue slid 23.2% in 2007, 28.9% in 2008 and 29.5% in 2009. New-car dealers watched sales plunge 28% in 2009. Single-location sit-down restaurants stalled, losing ground to chains and their cheaper offerings.
But now, such industries are expected to surge back, according to IBISWorld.
Revenue from new homes will rebound 11.1% in 2012, 15.7% in 20113 and 16.5% in 2014, according to researchers, followed by single-digit growth through 2017. The $167.9-billion industry will also boost ancillary businesses, such as furniture and appliance makers.
High demand has pushed up home prices around the country by 3.8% -- their largest leap since 2006, real estate data provider CoreLogic revealed this week.
And roughly 12.4 million new vehicles will be driven off dealer lots this year, according to the IBISWorld report. The auto industry -- along with sideline companies such as car washes -- will enjoy growth through 2017, raking in $510 billion in 2012 as consumers choose fresh wheels over older cars and their mounting maintenance costs.
Auto sales in August were healthy, with General Motors Co., Ford Motor Co. and Chrysler Group all reporting double-digit growth.
Independent restaurants can expect 2.7% annual growth on average through 2017, according to IBISWorld.
Other recent forecasts have been less rosy, however.
FedEx Corp., whose shipping business is often considered an economic indicator, lowered its profit outlook for its first quarter due to “weakness in the global economy.” The recent holiday weekend saw record gasoline prices -- usually a damper on spending in other sectors. World food prices soared 10% in July due largely to deep drought conditions in the Midwest.
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