NVI Technical College Information

Economic Feasibility

Deloitte ’ s forecast assumes that durable goods spending starts to

2. As consumer services recover, what happens to durable goods?

fall over the next few years as consumer spending “ renormalizes ”

and consumers resume spending on services. While services

The pandemic sparked a remarkable change in consumer spending

spending grows more quickly, total consumer spending slows to a

patterns. Spending on durable consumer goods jumped US$136

level slightly below the rate of household income growth, as the

billion in 2020, while spending on services fell US$473 billion over

excess savings households accumulated during the pandemic period

the same period. Households substituted bicycles, gym equipment,

are exhausted.

and electronics for restaurants, entertainment, and travel. This trend

A

started reversing after mid-2021, and by the end of 2022, real

There is a silver lining for some households in the tight labor

durable goods purchases were down over 4%.

market/high-inflation environment of the past couple of years. Low

wage workers have seen real wages go up, while high-income

However, consumer purchases of durable goods have started

workers have experienced the greatest erosion in the value of their

growing again. With the exception of motor vehicles, this trend

pay. It remains to be seen whether this reduction in inequality will

seems unlikely to continue. If consumers just return to their

continue, but it ’ s certainly welcome news to lower-wage workers.

prepandemic spending patterns, durable consumer goods sellers

will be looking at a 20% fall in spending. And consumers could

Retirement remains a significant concern for many workers: Even

conceivably spend even less, since the durable goods they

before the crisis, fewer than four in 10 nonretired adults described

previously bought aren ’ t going to wear out that quickly.

their retirement as on track,

Source: Deloitte

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