The Black Informant

This first report is about 2 years old, but it is a great reference.

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CONSUMER EXPENDITURE DATA

From “The Buying Power of Black America”

THE BUYING

POWER OF

BLACK AMERICA - 2003

This is the eleventh edition of Target Market News’ annual report on African-American

consumers. Again, most of the increases were in categories most influenced by women’s

purchases. The economic slowdown continues and surely have an impact on future spending.

In 2003 black households had $656 billion in earned income.

Apparel Products and Services . . . . . . . . . . . . . . . . . . . $23.0 billion

Transportation, Travel and Lodging. . . . . . . . . . . . . . . . . . 4.8 billion

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You can also find out the same information back to 1996. This information came from the website targetmarketnews.com. The link to these actual figures can be found here.

Also, check this out…

Release Date: Tuesday, September 30, 2005

BUYING POWER OF U.S. MINORITIES CONTINUES UPWARD CLIMB, SAYS UNIVERSITY OF GEORGIA’S SELIG CENTER FOR ECONOMIC GROWTH

WRITER: Jim Kvicala, 706/583-0931, jimkvicala@terry.uga.edu

CONTACT: Jeff Humphreys, 706/425-2962, jhumphre@terry.uga.edu

ATHENS, Ga. — A report on minority buying power released today by the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business projects disposable income controlled by minorities will continue growing at a faster rate than that of white households at least through 2010.

“The fast-paced growth of minority buying power demonstrates the increasing economic clout of minority consumers,” said Jeff Humphreys, Selig Center director and the report’s author. “One implication is that business-to-consumer companies do not necessarily have to look overseas to find booming markets, as there are great opportunities right here in America’s multicultural economy.”

Buying power, also referred to as disposable income, is the total personal income available for spending on goods and services after taxes.

With birth and immigration rates exceeding the national average and improving employment opportunities, African Americans, Hispanics, Asians and Native Americans should all experience above-average growth in buying power over the next five years, Humphreys said.

The fast-paced growth of minority buying power is significant because the market share claimed by a targeted group of consumers directly affects the cost of providing them with goods and services. The higher the market share, the lower the cost of reaching potential buyers in that group, he said.

Humphreys is the author of “The Multicultural Economy: Minority Buying Power in the New Century,” a series of state-by-state minority buying power projections he began in 1990.

Interesting insights from this year’s report include:

* By 2010, the combined buying power of African Americans, Asian Americans and Native Americans will exceed $1.7 trillion, more than triple the 1990 level of $454 billion. That’s a gain of almost $1.2 trillion or 268 percent.

* Based on its size, growth rate and concentration, Georgia remains one of the nation’s most vibrant and attractive African American consumer market. Not only is it ranked fifth largest in African American buying power, it’s also ranked fifth in terms of African Americans’ share of total buying power. One out of every five dollars spent by Georgia consumers is controlled by African Americans.

* Asian American buying power is estimated at $397 billion for 2005, an increase of 240.4 percent since 1990. It’s forecast to reach $579 billion nationwide by 2010.

* In New Jersey, Asian Americans constitute 7.0 percent of the population, but they control 7.2 percent of the state’s buying power. Asian American buying power increased more between 1990 and 2005 (3.4 percentage points) in New Jersey than in any other state. In comparison, Californians with Asian ancestry make up 12.3 percent of the state’s population, but account for only 10.9 percent of its total buying power.

* California is the top-ranked state in terms of total buying power for every minority group except African Americans. (California is second in that category; New York is first.)

* Hispanic buying power in California for 2005 is an estimated $202.6 billion. On its own, California’s Hispanic buying power exceeds the total buying power (all groups) of 36 of the 50 states.

* Native American buying power, estimated at $51.1 billion nationwide for 2005, is growing fastest in West Virginia, where Native American buying power grew 388.6 percent between 1990 and 2005.

Initially limited to African Americans, Humphreys eventually expanded his studies on minority buying power to include the nation’s most populous racial groups, as well as Hispanics, who are categorized by the U.S. Census as an ethnic group and not a racial minority. “The Multicultural Economy” estimates minority buying power by applying economic modeling and forecasting techniques to data from various U.S. government sources. The model developed by the Selig Center integrates statistical methods used in economic forecasting with those of marketing research.

In addition to the state-by-state breakdowns, the 2005 report also estimates minority buying power in Georgia and Florida on a county-by-county basis and by Metropolitan Statistical Areas (MSAs).

The Selig Center for Economic Growth was established in 1990 in memory of Atlanta entrepreneur Simon S. Selig Jr., a 1935 Terry College graduate, by his son, Steve Selig, and daughter, Cathy Selig, both of Atlanta. The Selig Center also publishes the college’s annual “Georgia Economic Outlook” forecast and produces commissioned studies for the state and the private sector.

NOTE: Media who would like to receive the full report, “The Multicultural Economy,” saved as PDFs may contact the Terry College’s Communications Office at news@terry.uga.edu.

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This is the section on black buying power from last year’s report (click here for the full report):

The Selig Center projects that the nation’s black buying power will rise from $318 billion in 1990 to $585 billion in 2000, to $723 billion in 004, to $965 billion in 2009, up by 203 percent in nineteen years—a compound annual growth rate of 6 percent. This overall percentage gain outstrips the 140 percent increase in white buying power and the 159 percent increase in total buying power (all races combined). In 2009, the nation’s share of total buying power that is black will be 8.7 percent, up from 8.4 percent in 2004 and up from 7.4 percent in 1990. Nationally, African-American consumers will account for almost nine cents out of every dollar that is spent. The gains in black buying power reflect much more than just population growth and inflation. Of all the diverse supporting forces, perhaps the most important is the increased number of jobs across the nation. Compared to 1990, employment opportunities have improved for everyone, including African-Americans. The increasing number of blacks who are starting and expanding their own businesses also contributes to the gains in buying power. Favorable demographic trends help, too, since the black population continues to grow more rapidly than the total population. From 1990 to 2009, the nation’s black population will grow by 29.9 percent compared to 12.1 percent for the white population and 23.7 percent for the total population. Also, compared to the white population, larger proportions of blacks are either entering the workforce for the first time or are moving up from entry-level jobs, and this push to buying power will be very important in coming years. In 2004, the ten states with the largest African-American markets, in order, will be New York ($67.8 billion), California ($55.6 billion), Texas ($53 billion), Georgia ($49.5 billion), Florida ($43.3 billion), Maryland ($40.9 billion), Illinois ($39.7 billion), North Carolina ($32.5 billion), Virginia ($30.4 billion), and Michigan ($30 billion). Maryland, North Carolina, and Virginia are the only ones among the top ten black markets that did not also rank among the top ten markets for all consumers, however. This vibrant consumer market is widespread; and in 2004, the five largest African-American markets account for 37.2 percent of black buying power. The five states with the largest total consumer markets account for 37.7 ercent of total buying power. Similarly, the ten largest black markets account for 61.2 percent of the African-American market and the ten largest total consumer markets account for 55.9 percent of total buying power. In order, the top ten states ranked by the rate of growth of black buying power over 1990-2004 are Minnesota (302 percent), Nevada (299 percent), Utah (264 percent), Idaho (233 percent), Vermont (207 percent), Georgia (206 percent), Arizona (196 percent), Delaware (172 percent), South Dakota (170 percent, and Washington (167 percent). All have flourishing markets, but only Georgia appears on both the “largest” and “fast-growing” top ten lists. The combination of size and growth rate makes Georgia an especially attractive and dynamic African-American market. Nationally, the percentage gain in black buying power from 1990 to 2004 will be 127 percent. Georgia also ranks high in market concentration. From 1990 to 2004, the ten states (including the District of Columbia) with the largest share of total buying power that is black are the District of Columbia (35.8 percent), Mississippi (23.6 percent), Maryland (21.9 percent), Louisiana (20.2 percent), Georgia (20.2 percent), South Carolina (18.6 percent), Alabama (17.1 percent), North Carolina (14.4 percent), Delaware (14.1 percent), and Virginia (13.3 percent). The 4.5 percent increase in African-American’s share of Maryland’s consumer market (17.4 percent in 1990 to 21.9 percent in 2004) was the biggest share shift in the nation, followed by a 4.2 percent increase in share in Georgia (16 percent to 20.2 percent) and a 4.1 percent increase in share in Mississippi (19.4 percent to 23.6 percent. The share of buying power controlled by black consumers will rise everywhere except for the District of Columbia (-6.8 percent), Alaska (-0.2 percent), California (-0.2 percent), Colorado (-0.1 percent), Hawaii (-0.1 percent), and New Hampshire (no change). By comparison, African Americans’ share of the U.S. consumer market rose from 7.4 percent in 1990 to 8.4 percent in 2004. Due to differences in per capita income, wealth, demographics, and culture, the spending habits of African Americans as a group are not the same as those of non-black consumers (e.g., white and other races combined). The most recent Consumer Expenditure Survey data (for 2002) indicate that the average black household spent in total only 72 percent as much as the average non-black household. The values are for money income, which differs somewhat from total buying power, but nonetheless offers some insights into spending by black consumers. Despite their lower average income levels, African Americans spent more on telephone services and shoes. Blacks also spent a higher proportion of their money on children’s apparel; TVs, radio, and sound equipment; personal Georgia Business and Economic Conditions 4 care products and services; women’s and girl’s apparel; and major appliances. They spent about the same proportion of their total outlays on furniture, household operations, shelter, gasoline and motor oil, life insurance, and cash contributions. Blacks spend a significantly smaller proportion of the total expenditures on entertainment, health care, reading materials, household textiles, and small appliances. The same survey indicates that black households are only slightly larger than the average non-black household (2.7 persons for blacks versus 2.5 persons for whites and others). Black households are more likely to have children under 18 (0.9 persons for blacks versus 0.6 persons for whites and others) and slightly less likely to have persons 65 and over (0.2 persons for blacks versus 0.3 persons for white and other households). Blacks have approximately the same number of wage earners per household (1.3 wage earners) as white and other households (1.4 wage earners), but have only 1.3 vehicles per household compared to 2.1 vehicles for white and other households. There is a substantial gap in homeownership rates, suggesting a possible opportunity for market expansion in the years ahead. The data indicates that 48 percent of blacks are homeowners compared to 69 percent of white and other households. Among homeowners, 67 percent of blacks have mortgages compared to 61 percent of whites and others.