Archive for Economic News

Why Corporate Headquarters Are So Desired

The ability of any city to attract or retain the headquarters of an average-size company is worth $3 million to $10 million per year in public contributions to local nonprofits, in a recent post from the Harvard Business Review. The effect seems to be due to the number of wealthy individuals present in the region rather than to the company’s direct contributions. A new headquarters yields, on average, some 275 additional individuals with income over $100,000.

This supports a statement from Local First Arizona about how a much larger percentage of money spent with a locally owned business will stay in the local economy.

Planned Retirement Age is Going Up

A Gallup poll found that the number working Americans expecting to retire at 65 or older has risen from 44% to 61% over the last 15 years, while the number predicting retirement before 65 has fallen from 50% to 29%. The reasons may be related to shifting views on the rewards of working, as well as on the shrinking value of investments.

expected retirement age

Expected Retirement Age

Details from France Provide Signals

The Harvard Business Review’s Daily Stat republished information from the McKinsey Quarterly about how people over age 55 will drive two thirds of all growth in consumer spending in France over the next 20 years. These findings can offer implications for other developed countries.

French Consumers

French Consumers

Consumers do respond differently to different types of media. While most of us still prefer direct mail, older consumers prefer it even more.

USPS January 2011 Price Increases

The United Postal Service (USPS) will increase prices on January 2, 2011. The most noticeable will be the increase in the price of a first class stamp from $0.44 to $0.46. The post office is doing many things to help. They are releasing some new forever stamps in October. The stamps, featuring evergreen trees, can be purchased for $0.44 and used “forever” to mail first class letters.

Prices for Standard Mail and Periodicals will also go up about 5.6%. Knowing the facts in advance can help in planning for end of the year advertising and direct mail.

Waste, Signal of Economic Growth?

The Harvard Business Review highlighted a story from Bloomberg about the number of US rail cars filled with waste as an indicator of economic growth.

The stories stated that the number of cars jumped to 79,044 in April and May 2010, an increase of 45% from a year earlier, according to the Association of American Railroads. That’s the biggest such increase since at least 1994. The cargo consisted of iron and steel (42%), municipal waste and demolition products (32%), paper (11%), ashes (5%), nonferrous metals (4%), miscellaneous (4%), and chemical waste (1%).

This is an unusual statistic and source of optimism about the economy, but something that has not gone up since 1994 got our attention.

Estimated 1.2 Million Households Lost

The Mortgage Bankers Association reported that 1.2 million households were lost from 2005 to 2008, despite a population increase of 3.4 million. The decline in households has likely contributed to the excess supply of apartments and single family homes on the market. Household formation should pick up once the job market stabilizes. Young adults need a paycheck and a sense that they will have sustainable employment before living on their own.

This trend can also have some opportunities. Young adults may have extra spending money without having to be responsible for necessities. This will also help to boost the recovery because when things look more optimistic, there will be a pent up demand for more housing and all the needed household items.

This trend can lead to other “life changing events”, can we help you take advantage of current news and trends? Now may be a great time to send mail.

Is This The Upturn?

According to an extract by Harvard Business Publishing of a snapshot of Economic Conditions, by McKinsey Global, 69% of a global panel of executives surveyed during the second week of December 2009 said they expected their national economies to be at least moderately better by the end of the first half of 2010. In fact, 24% said that an upturn has already begun.

A majority of executives expect consumer demand for their goods to rise in the near term. Respondents offer relatively positive views of the economy and say they can now make longer-term strategic plans. Just over half of executives continue to say economic conditions are now better than they were in September 2008.

Executive Confidence Rising

According to an article extracted from a November 2009 McKinsey Quarterly by Harvard Business Publishing, executives are becoming more optimistic about the economy and the strength of the recovery. In the survey conducted during the last week of October 2009 that measured executive mood, 51% said they think the economy is better now than it was in September 2008.

Prepare For the Upturn

Many people are hurting and according to most experts it is going to take a long time for the employment rate to pick back up. However, just as it took a very long time for people to admit that our economy was not good, things may be better than we think.

In October of 2008 I looked at what was happening in the economy and tried to understand what many people were saying and why they said it. I looked at a history of recessions in the U. S. since the early 1900’s. Today I looked at the economy from the other perspective, focusing on the periods of growth and prosperity; believing that the glass is half full, not half empty.

I found details about the US Gross Domestic Growth Rate (GDP) going back to 1947. A negative GDP for two or more quarters is what defines a recession.

When I look at the chart I see:

  • Times have been good much more often than times have been bad
  • It looks like the worst is over and we are moving into another growth period
  • Perhaps the recent decline would not have hurt so much if growth in 2006 was not so big, I think we thought the good times would go on forever

What about your strategy right now? This is a great time to start cultivating new prospects. Get your name, your products, your solutions in your customers minds so that when they are ready to buy, you will come up on the short list. Think about sending mail.

Should you alter your marketing plan to prepare for the upturn?