Auto Service World
News   November 14, 2006   by Auto Service World

Affluence Survey Shows Cautious Spending


Several important changes in the 12-month economic outlook and spending plans of the wealthiest 10% of Americans are revealed in The Affluent Market Tracking Study #10, the latest report in a series of twice-yearly surveys by The American Affluence Research Center (AARC).
According to Federal Reserve Board research, the 11.2 million households represented by this survey have a minimum $800,000 net worth, an average $256,000 income, and account for about a third of the total US gross national product.
The outlook of the affluent for future economic conditions has declined substantially since the Spring survey.
The composite Affluent Consumer Expectations (ACE) Index for economic conditions 12 months from now, though still positive, dropped to 105 from 118 six months ago.
Index values can range from 0 (negative) to 200 (positive), with an index of 100 being a neutral reading.
Their projected $31 billion in expenditures for Christmas and Hanukah holiday gifts is 1.0% below 2005 spending levels.
This contrasts with a 5% increase projected in an early October survey of the total adult population for the National Retail Federation.
The Report suggests that the adults in these household spent, in total, an average of $2,740 on 2005 holiday gifts.
Approximately three-quarters of the respondents expect to spend the same amount for holiday gifts this year as last year.
The number who expect to spend “less” (17%) this year is more than double the number who expect to spend “more” (8%).
Overall, 45% reported no plans for major expenditures (new motor vehicle, home, boat, or major home remodeling) in the next 12 months.
The AARC surveys also track spending plans for 17 categories of goods and services, including major appliances, home computers, furniture/furnishings, entertainment equipment, casual and upscale dining out, entertainment, recreation, domestic and international travel, designer and non-designer apparel, collectibles, fine jewelry, and political and charitable contributions.
Of the 17 future spending indexes, only five remain in positive territory, and four of these declined from the prior survey.
Of the 12 categories with negative indexes, all declined (several by substantial amounts) from the Spring survey.
The Future Spending Index average, at 90.1, is now at its lowest level since tracking began in Fall 2003.
AARC is a Miami based firm that provides marketing research and consulting services that focus on the lifestyles, attitudes, and purchasing behavior of the wealthiest segments of the population.


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