In The Economist last week the lead article "Comeback Kid" explained how the make-up of the US economy is changing as it rebounds from the economic crises. The trade deficit has shrunk from 6% of GDP in 2006 to 4% now.
This growth in exports has come from all corners of the world, with the largest growth not coming from the US’s traditional trading partners in the OECD, but from the growth markets of China and Latin America. The increase in exports was 20% with the OECD since 2007, but 53% with China and 51% with Latin America.
US export growth since 2007. Source: The Economist
This data is a real lesson for us in Europe, showing how remodelling an economy from consumer focused to more outward looking can make a country more sustainable.
As a region, we can’t go on relying on consumers to spend our way out of trouble; we need to offer the world as valuable goods and services as we take.
At On Device Research we strongly believe that the future of western economies is to trade with emerging markets, or as we like to call them ‘growth markets’ where millions of people are coming out of poverty and into consumerism, creating a market for western goods and services.
To monitor this trend we are launching a Young Consumer Confidence Index to track the opinions of these new consumers. It will launch in China, India, Nigeria and Brazil, the combined populations of the countries reaches 2.94 billion people, 42% the world’s population.
Source: On Device Research, June 2012
Young consumers in growth markets are roughly twice a confident in the economy compared to those in the US, providing a fantastic opportunity for US companies looking to export.
I presented the initial results from the first wave of the study at a mobile research conference in Cincinnati last week, and although only preliminary results, it showed that the average young consumer in one of these markets is almost twice as confident in their economic prospects as the average young consumers in the US.
The full data will be released in September, once we have three month average data and will be available free of charge. Please sign up to our mailing list for a first glance at the data.
PS. To get the YCCI as soon as we make it public I recommend signing up to our newsletter »