The Recession Report
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Global Demographic Ltd gives you a better perspective of the impact of the Recession on Household Expenditure**.

A new report series released by Global Demographics Ltd shows that the impact of slower GDP growth on household expenditure varies significantly by country and income group.

In the UK with the economy shrinking by 4.8% in 2009, total household spend will decline by 4.1%. However, the story does not stop there. A closer look at the movement of income segments shows that total expenditure of high income households will decline by 20.5% whereas the total spending of low income segments will increase by 14.3%. The findings uncover market opportunity even in an averse economic environment.

In China, an opposite effects occur. Even under the worst case scenario (GDP growth at positive rate of just 2.7% pa) the affluent segment is where the growth remains. Total spending by high income households (top 16% of all households in China) will increase by 6.8% and with total recreation, transport and communications expenditure all growing in excess of 7% per annum. If China achieves the more consensus total real GDP growth rate of 6.7% for 2009, then the same categories are expected to grow by 17% within the high income household segment. Overall this segment accounts for 35% of all household expenditure in China.

This difference in outcomes means new market opportunities are emerging in the short term, and marketers need to revise their strategies to take advantage of them during these difficult times.

Clearly the strategy a company adopts for individual market scenarios has to be quite different. Global Demographics Recession Reports help quantify what might happen to the value of consumer markets in each of 61 countries in the world under three difference GDP scenarios and for three income segments for the next two years and helps individual companies evaluate their strategies to take advantage of the opportunities during Recession.

Reports are available for 61 countries as well as a Global Perspective Report which looks at the relative sensitivity of total household expenditure by income group for 7 regions of the world (for example, total Affluent Asia, South America, etc).

Three scenarios are examined, IMF current forecast, IMF minus 2 percentage points and IMF minus 4 percentage points in 2009 and half that reduction in 2010. By using three GDP growth scenarios the reader can see just how sensitive overall consumer market will be to variations in the GDP, which income groups are likely to be impacted most, and which expenditure categories are most affected.

For each country (and region in the Global Report) the report details the following information:

  • The projected GDP growth scenarios
  • the impact of each scenario on average household income
  • the impact of each scenario on the number of employed persons (assuming worker productivity trends are maintained)
  • the impact on the distribution of households by income, using three major income groups, showing how their size could be expected to change in 2009 and 2010
  • the impact of the changing a number of households in each income group on the total expenditure of that income segment in 2009 and 2010 as well as for all households
  • the impact, by income group as well as overall, of the three GDP scenarios on expenditure on each of 12 categories for 2009 and 2010.
An example of the country level report can be seen by clicking here.

An example of the Global Report can be seen by clicking here.

Format: PowerPoint
Delivery: email or download from website
Price: US$150 for country level report and US$250 for the Global Regions Report
For more information, an example of the reports, and to purchase these reports online please visit our website at www.globaldemographics.com.
*Global Demographics Ltd has been modelling household income and expenditure patterns over the last 10 years. For this Recession Report we have and examined the impact of the IMF forecast to 2009 and 2010 on household expenditure patterns. Two other scenarios are also analysed: the first is where GDP growth rate is two percentage points lower than the IMF forecast and the second is where the GDP growth rate is four percentage points lower than the IMF forecast.