US consumers still worried about travel and finance
An online survey of adults in the US during May 2002 has revealed continued consumer concerns about spending and travel, following similar studies conducted in October and November 2001 by DVC Worldwide.
However, the study of 1,600 adults, which addressed the influence of the September 11 attacks and the national economy on consumer behaviour, indicated a slight lessening of key concerns compared with earlier studies, and a sense that the US economy may be starting to recover. Recent discoveries of corporate accounting fraud may, however, lead to another - and more long lasting - downward economic trend.
"While the survey shows clearly that consumer behaviour has not returned to pre-September 11 levels, we can try to understand which factors will need to be resolved in order to regain that level, and determine the impact on businesses," said Sue Furlong, president of DVC. In each of the surveys conducted since September 2001, consumer behaviour was measured for immediate and future intention regarding finance, shopping, travel and lifestyle (including relationships).
What recession? Almost two-thirds of all adults agree, although cautiously, that the recession is over: 53% believe it 'somewhat', and 10% believe it 'completely' or 'very much'. However, 37% do not believe that the recession is over at all. Additionally, female respondents expressed greater economic concern: 44% of women (against 28% of men) do not believe the recession is over.
Finance Most consumers are being conservative with their tax refunds, with 23% saying they are less likely to invest, and 20% saying they are more likely to reduce debt. The 37% of adults who are pessimistic about the recession's end are even less likely to use their refund to invest (32%) and are more likely to reduce debt (28%). Paradoxically, the 37% who are more pessimistic said they were more likely to spend their tax refund (because of reduced income or unemployment, for example.)
Shopping Consumers in general are expected to show restraint in their buying this summer. Despite all the incentives, they are still less likely to buy a new car (although they were only 23% negative compared with last November's 26%). Home buying is also 22% less likely. Consumers are also less likely to buy 'considered purchase' items (stereo, TV, DVD, computer, home office equipment, carpets & furniture, and other major appliances). Personal care 'pampering' products remained stable (67% likely to buy) as people seek a little luxury.
Travel While air travel is expected to remain lower than before September 2001, consumer concerns over air travel and hotel stays have decreased since November, with 32% being less likely to plan an air travel holiday (against 40% in November 2001), and 15% being more likely to stay in a hotel (against 10% in November's survey).
"With air travel still down, we wanted to see if the reasons for this were still more tied to safety concerns than financial ones - as they were back in November," added Furlong. "The shift in travel behaviour is quite optimistic."
Lifestyle The need or desire for personal contact is decreasing. Consumers are still using the telephone more than before September 11 but only 34% (against 44% in November) are more likely to call friends and family more often. And 30% are more likely to use e-mail to contact family and friends.
Regarding entertainment, health and philanthropy, consumers in the US are getting back to normal, being just as likely to go to the movies, entertain friends at home or give up smoking, and around 20% are more likely to make donations to charities.
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