“Austerity fatigue” and other good signs!
Tis the season to be jolly . . . and it’s got me looking only for encouraging news. That’s the way I intend to celebrate the end of this current decade which, let’s face it, has genuinely sucked! It began with the spectacular failure of the dot-coms, witnessed the horrors of Sept. 11, and wraps up with a great recession. Oh, could “sucks” be an understatement?
So, I like this week’s good news from the Associated Press that spending is returning on things abandoned when the recession hit. For me, that sheds a heartening light on the new decade that begins in 23 days.
According to the AP, few companies have taken a bigger hit in the recession than Starbucks. But now, customers are once again lining up for their $4 caffeine fix. Starbucks’ revenues have risen 17 percent in the most recent quarter compared to a year ago, and net income has almost doubled. Similarly, stronger-than-expected sales are being reported by specialty retailers like Victoria’s Secret, demonstrating consumers are again making at least modest splurges.
David Palmer, an analyst with USB Investment Research, reportedly believes “austerity fatigue” may finally be setting in. The research firm ShopperTrak upped its holiday sales growth forecast to 3.2 percent from 2.9 percent following a solid November start. Some speculate that the spending comeback kicked in when the stock market began to rally in August and higher income Americans, at least, began feeling better about their finances. While some economists continue to predict frugality will be the “new normal,” others lean more to the belief that spending is cultural and there will be a strong return to it as the economy grows again.
As for us in the boating industry, we have long recognized that we must start seeing some generally indulgent spending before we can realize our own recovery, say, in 2011.
And, maybe we’re already seeing some signs. As reported in TradeOnlyToday this week, U.S. brokerage sales in November gained substantially in total valuation, compared with the same month last year. Reports by YachtWorld.com member brokerages to SoldBoats.com, indicate that valuations climbed to $388 million, a whopping 76 percent over the previous November on 77 boats vs. 48 a year ago. For the year to date, overall powerboat sales are up 10 percent in units and 22 percent in valuation — sailboats are up 7 percent in units and 7 percent in valuation.
Finally, consumer borrowing is reported to be rising again. In October, it went up at an annual rate of $3.4 billion, the largest amount since July, 2008 when it gained $5.7 billion. Unfortunately, news of the rise is somewhat tempered by the fact that it includes student loans, which have also risen since a new law makes the government the primary student loan lender. Still, up is up and another sign that recovery is moving forward. We should look to a continuing positive impact for boating as we head into 2011.