More wealthy consumers plan to increase their spending in key luxury categories for the first time since the first quarter of 2011, according to the 2012 Survey of Affluence and Wealth in America.
The study, produced by American Express Publishing and Harrison Group, examines Americans who have a minimum discretionary income of $100,000.
According to the survey, 14 percent of affluent consumers plan to spend more in luxury categories such as automotive, luxury hotels and resorts, home entertainment and electronics, vacations, watches, and jewelry. Spending in the jewelry and watch categories will be up 5 percent and 9 percent, respectively, in 2013.
“After six years of reporting on the difficulties of the recession, it is wonderful to finally have a positive forecast in the luxury space,” said Cara David, senior vice president of corporate marketing and integrated media of American Express Publishing Corp., in a statement.
The forecast predicts key portions of the luxury sector of the economy will grow at 3.4 percent—two and a half times the forecasts of national growth in GDP. The top 1 percent of Americans now save 35 percent of their household income; however, because 48 percent own their homes outright and 81 percent carry no credit card debt, “they are in a better position to spend on luxury,” added David.
Consumers in pursuit of quality, craftsmanship, and service—what the study calls “Worth Dominant” consumers—are expected to spend nearly $58 billion dollars on core luxuries in 2013. Consumers looking for discounts, or “Deal Dominant” consumers, are expected to spend $33 billion on those same categories.
“It is fascinating that lessons learned from the recession—resourcefulness, self-reliance and a deep sense of financial responsibility—continue to dominate purchasing strategies in the country’s most successful households,” said Dr. Jim Taylor, vice chairman of Harrison Group, in a statement. “It’s intriguing that the same rules have split the market, with one group willing to spend for the very best and the other prepared to discount their expectations to get a better price.”
Seventy-six of the top 10 percent also insist that the country is still in recession. However, the number of families who say their assets, financial situation, and household income have improved vastly outnumber those who maintain that these have deteriorated in the past year.