Area Development Homepage >> Economics/ Government Policy >>

Forecast 2011: Recovery Hinges on Consumer Activity

The recovery may have officially ended in 2009, but businesses are still waiting for a rebound. Consumers will determine when post-recession growth begins.

Phillip M. Perry (November 2010)

(page 3 of 3)

Editors Picks

Consumers are also borrowing less. "Three years ago, people were spending their home equity at retailers," says James Dion, president of Dionco Inc. "Then, all of a sudden, that money disappeared. Also, credit card issuers have tightened up credit lines. People who had $2,000 limits before might only have $900 or $1,100 now. As a result, the use of credit cards has dropped dramatically in favor of debit cards and cash."

Ready to Spend
In the long term, consumers refinancing their mortgages will earn more cash to spend as a result of lower debt payments. Low interest rates and minimal inflation - two conditions economists expect to persist through 2011 - are feeding this trend.

The question remains: When will a robust rebound happen? It depends on consumers' confidence in their own balance sheets. "At some point, consumers are going to say, `I have started saving, my finances are in better shape, and now I need to replace my car and buy some new things that I have been avoiding,'" Simson says. "Then demand will be back, and it will be dramatic."

<< Back Page1 2 3

Save/Share Article

About the Author

Phillip M. Perry
Award-winning journalist Phillip M. Perry has published widely in the fields of business management, workplace psychology, and employment law. A 20-year veteran of both sides of the editorial desk, national magazines now syndicate Perry's work. He has written for periodicals including Research Technology Management, Law Practice Management, Sales & Marketing Strategies, World Trade, Business International Money Report (published by The Economist), Corporate Finance, and International Business.

More articles by Phillip M. Perry

ASK AREA DEVELOPMENT

Have questions, comments or concerns about this article? Submit to Ask Area Development here and the author or an expert from our network of site selection and facility planning professionals will answer:

Privacy policy / GuidelinesArea Development will select a number of questions to answer each week. An Area Development representative will contact the submitting reader directly with feedback. Additionally, all submissions are eligible to appear online or in our print publication. If your question is selected for publication we will include and publish your first name, job title and industry only. The full identity of the submitting reader will not appear in published format.Area Development will not publish, share with any third parties, or use for marketing purposes any personal information submitted here without the express consent of the submitting reader.

News Items

Around The Web

Studies/Research

News Items

Around The Web

Studies/Research

General Motors Invests $44.5 million To Add Logistics Optimization Center At Its Lansing, Michigan Assembly Plant

State Resource map

Click on any state for links to current state news and data, contact directory, corporate taxes, financial and business incentives, credits, grants and available buildings and sites

State Resource Sponsor