Is The Recession Over? New Affluent Survey Stats May Provide Clues
Many books, much research, a lot of time and effort have been written about the spending attitudes of the high and ultra high net worth population, mainly because of the challenge they consistently present: they are an elusive group, as they would prefer to remain relatively anonymous. However, the American Affluence Research Center's work stands out in defining the attitudes and behaviors of this group, as their stringent quantitative methods produce cutting edge results. One ( of many) is -- though there is pessimism about the economy, affluent people are still buying luxury commodities. Go figure!
The most recent Affluent Market Tracking Study #17 was released on April 15, 2010, It is an independent report, not funded by any marketing group, club, or project that would lend possible bias to the data collection methods, questions or answers.
The Center publishes two direct mail surveys a year, each year, spring and fall. Those who are chosen to respond are subjects chosen at random to be representative of the precisely defined population of affluent households, consistent with the research done by the Federal Reserve Board. Over 690 responses were received, and the survey results were based on 525 men and women who promptly responded and met the minimum net worth requirement. The net worth categories on the questionnaire conform to those used by the Federal Reserve Board to define the wealthiest 10%, 5% and 1% of US households. This demographic has the following in common:
* A minimum net worth of $828,000
* Has an average net worth of $3.1M
* Has an average income of $256,000
* Earns 36% of the total income of all Americans
* Owns 63%of the personal assets of all US households
* Holds 89% of the total value of all publicly traded stock and mutual funds in the US
* Owns a primary residence valued at over $651,000.
With all that said, the collection methods, as well a discussion of many other affluent consumer topics covered in this survey can be accessed by contacting the American Affluence Research Center. It also should be explained that I have chosen results hopefully most relevant hopefully most relevant to Luxist readers. One note here – all the indexes are calculated in the same way: they range from a high of 200 to a low of zero. All of the underlining is mine.Current and Future Business Conditions: Sort of depressing.. but then again...
- The assessment of current business conditions in this country was as follows: 68% saw it is negative, 24% saw it as neutral, whereas only 8% saw it as positive. YIKES! The index for future conditions seems more positive – better is 44%, same is 41% and worse is 15%
- One of the next research areas deal with the respondent's plan to purchase any of eight major luxury items in the next twelve months. Here are some surprising results. They planned on buying cars, cruises, home remodels, and primary as well as secondary residences. These purchases translate this way, according to the survey: "Given the 11. 2 million US households that comprise the wealthiest 10%, it can be calculated that this market segment represents the potential of approximately 2.0 million motor vehicle acquisitions, 1.8million home remodeling projects;1.7million cruise buyers, and the acquisition of 482,000 primary residences and 336,000 vacation residences...in the next 12 months."
Changes in Spending Behaviors: Spending more to see the USA?
- Here, the results are fascinating as only one of the categories is in the positive territory ( over 100) – and that was in domestic vacation travel at 106. This number could be seen as a subtle clue to the beginning of a sense of optimism – as compared to Spring 2009 when the index was 84. It must be said, that all other areas scored higher, typically between 4 to 9 points higher from Fall 2009, and 10-15 points higher from the quagmiric dregs of Spring 2009.This is good news!
Affluent Consumer Expectation Spending – Will you buy more home computers, home entertainment equipment, home furnishings, upscale dining, recreational activities, domestic and international vacation travel? Survey says YES!
- This dimension of research deals with Affluent Consumer Expectations (ACE) Spending. There are three components here: (1) future homes durable spending (2) future leisure spending (3) future vacation travel spending – all three areas increased from the prior Fall 2009 survey and are now well above the historic lows established in the Spring 2009 survey. This is good news!
