Consumer Boom Is Over, Says CIM

Consumer spending is predicted to slow during 1998, with consumer durables being the worst hit, according to a report published by the Chartered Institute of Marketing (CIM).

The Quarterly State of the Market Report forecasts that consumer durables, especially car sales, will feel the effect of an economic climate where building society windfalls are less and less frequent. In 1997, spend on consumer durables grew by 5.5% while in 1998 this figure is expected to drop to just 2.3%.

In a warning which will no doubt worry car advertisers in particular, Professor Douglas McWilliams, the CIM’s economic advisor says: “Windfalls provided an ideal opportunity for consumers to splash out on one-off high cost purchases, such as cars. Sales of private cars were boosted considerably due to windfalls and the automotive market will now feel the pressure of a cutback on spending.”

The CIM also says that inflation will continue to fall with a figure of 1.4% predicted by the end of the century. However interest rates are likely to remain between 7 and 8% for most of 1998.

CIM: 01628 427033