Magazine article Marketing

When the Recovery Appears

Magazine article Marketing

When the Recovery Appears

Article excerpt

Now that the election is over, and the post-mortems more or less out of the way, the nation can re-focus its attention on the timing of the economic recovery.

Although retail sales fell in February and are expected to fall in March, the signs are that we were confidently dipping into our pockets over Easter with buoyant reports from the high street and away-from-home leisure venues.

Observers are, however, cautious of reading too much into the figures. After all, we have already one false dawn, following the cessation of hostilities in the Gulf. Removing political uncertainty was bound to boost consumer confidence, the question is whether displays of confidence due to post-election euphoria will continue?

While electoral uncertainty certainly had some negative impact on consumer confidence, two structural factors are key in sustaining consumer confidence or lack of it. These are unemployment and house prices.

As we have mentioned before in this column it is the rate of increase in unemployment rather than the absolute level that has the more dramatic impact on consumers' preparedness to spend. On this front figures for February point to a slowing down in the number of new job losses. This is a trend we are continuing to see.

On the housing front, the removal of electoral uncertainty combined with a lessening of people's fears about redundancy, will get the market started. Given the degree of pent up demand for housing and home related markets, a pick up in housing transactions will help kickstart the economy. …

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