The U.S. consumer market is increasingly driven by Hispanic and Asian consumers due to their expanding youthful populations, their educational attainments and their entrepreneurship, according to University of Georgia’s Simon S. Selig Jr. Center for Economic Growth.
According to the report that was released Sept. 24, the U.S. market is increasing by nearly $2 trillion per year with a projected total buying power in 2015 of $13.5 trillion.
The U.S. Hispanic market this year is to be $1.3 trillion, which is larger than the gross domestic product of Mexico, the report states. By 2020 it is to grow to $1.7 trillion.
The Asian market is to account for $825 billion in 2015 and grow to $1.1 trillion in 2020.
Jeff Humphreys, the center’s director, told Global Atlanta that favorable demographic growth, the young age of its population, their rising educational attainment and their entrepreneurial activism were the main factors pushing the growth of the Hispanic market.
The Asian market, he said, was marked by the extremely high level of educational attainment leading to high paying jobs, entrepreneurial drive and expanding population.
Dr. Humphreys also said that the study relied on U.S. Census data, which does not discriminate between legal and undocumented immigrants and includes “Anyone that they can get.”
And he added that he felt the U.S. Census figures were most likely underreported.
“The Asian and Hispanic markets will really drive the U.S. consumer market,” he says in the release.
“Those two groups will account for a disproportionate amount of growth,” Dr. Humphreys said.
“Those two groups will account for a disproportionate amount of growth. The African American market will still expand at a rate that’s compelling, but the Asian and Hispanic markets are where you see the really fast-paced growth.”
African American buying power, according to the report, is to reach $1.2 trillion this year and $1.4 trillion in 2020.
Dr. Humphreys, who has been preparing the Multicultural Economy report for 24 years, considers the biggest change during that period to the interest level for Hispanic estimates after Census 2000.
“That was kind of a wakeup call to corporate America about the importance of the Hispanic consumer. Many companies found that they were behind in terms of targeted market efforts to Hispanic consumers.”
He added that since the end of the recession there has been an increase in interest in Asian buying power numbers because as a group they were less affected that other groups.
“That’s primarily because Asians tend to be very highly educated and therefore were in occupations and industries that were less affected by the Great Recession.”
The report breaks down the power of minority subgroups such as Mexicans and Puerto Ricans in the Hispanic category and Asian Indians, Chinese and Japanese in the Asian category.
For a copy of the report, click here.