The blog continues to believe that the current downturn is a transition period, at least in the West, towards a more frugal way of life. And its theory has received a boost from a New York Times feature which suggests this might be happening in the bastion of consumerism, New York.
The NYT suggests the key question is whether middle class Americans “Can change their mind-sets and lifestyles in order to accumulate capital and work down debt?” And rather than focusing on upwardly-mobile lifestyles, it provides tips on how to be more frugal.
It says half-way measures might be to “make an effort to live off cash, not credit cards”, as “your spending may seem more real when green pieces of paper disappear, than it does when you swipe a card“. And it notes that previously “upwardly mobile Americans (are becoming prepared) to defer gratification, another necessary mind-set change”.
It also reports a Pew Research Center survey found that since 2006, Americans have begun to separate “need” from “wants“. Only 47% now think microwave ovens are a necessity, vs 68% in 2006: 54% now “need” air-conditioning vs 70%; 66% “need” clothes dryers vs 83%.
Currently, US consumer spending accounts for 16% of global GDP, and is the single most important driver for chemical demand. Companies therefore need to keep a very close eye on the potential implications of such a major shift in US consumer culture.
Helping you navigate the new normal