Hispanic Purchasing Power is world’s 9th biggest economy

U.S. Hispanic Purchasing Power

U.S. Hispanic Purchasing Power

The nation’s largest minority group controlled $686 billion in spending in 2004, the University of Georgia’s Selig Center for Economic Growth concluded, and the Hispanic purchasing power comprises the world’s ninth biggest economy. It’s larger than the GNP of Brazil, Spain or Mexico, reported the Hispanic Association on Corporate Responsibility.  Hispanic purchasing power is projected to reach as much as $1 trillion by next year (2010).

The main drivers of the surge in Hispanic consumer influence are education levels, labor force composition, household characteristics and accumulation of wealth.

Advertising expenditures aimed at U.S. Hispanics have grown while the overall ad market has slowed down. From 2000-2004, Latino-directed budgets from the top 50 advertisers rose from $658 million to $1.23 billion, or 87%. Major players such as Procter & Gamble, General Motors, McDonald’s and Coca-Cola have continually increased the amount they spend to reach this coveted market, which is becoming more desirable in terms of sheer numbers and economic clout.
• U.S. Hispanic purchasing power posted a compound annual growth rate of 7.7%

• Higher paying managerial and professional jobs are the fastest-growing occupational categories for Hispanics

• California and Texas account for more than 34 percent of all Hispanic purchasing power and nearly half of the entire U.S. Hispanic population

Source: TIA

Growth in Hispanic purchasing power

Reaching Hispanics

The growth in Hispanic purchasing power between ’00 and ’07 was 80% greater than that of non-Hispanics. It’s a growing list of drool-worthy stats like those that have an increasing number of marketers honing in on the group.

Eclipse Marketing just launched a Hispanic Marketing Division specifically to assist cable ops and program nets. Leading the group is MTVN/Univision vet Karen Habib. Univision teamed with Experian Simmons for extensive data on Latinos to present to advertisers.

What Univision and Experian Simmons found is that while many American consumers are feeling glum about the economy and reining in spending, Hispanics are more optimistic. 29% are more positive about the US economy in the coming 12 months (vs 21% non-Hispanic), 34% are optimistic about their finances in the coming year (vs 25% non-Hispanic); and the Hispanic average consumer confidence rating is 11% higher than non-Hispanics, and has remained constant since ’05, while the non-Hispanic rating has declined.

So why the disparity? Chalk some of it up to less plastic (thus less debt burden). Hispanics are 44% more likely to use cash to pay bills than non-Hispanics. There’s also less stress about potential home foreclosures as the group is almost twice as likely to rent their home as non-Hispanics (44% vs 23%). Following the economic meltdown, Hispanics have rebounded stronger. And many are now looking to buy a new home, or their first home. Experian found that following the economic crash, 7% of Hispanics still plan on buying a home in the next 12 months. Only 3% of their non-Hispanic counterparts said the same.

A few other findings to keep in mind as companies approach advertisers:
· Hispanics are consistently more frequent shoppers than non-Hispanics (34% vs 29%)

· Twice as many Hispanics are willing to pay for branded prescriptions as non-Hispanics (31% vs 15%)

· Hispanics are 38% more likely to buy from an advertiser than non-Hispanics

Source: Amy Maclean –