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Nielsen Economic Advisor Series: September 2008 Update
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Nielsen Economic Advisor Series: September 2008 Update







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Nielsen Economic Advisor Series: September 2008 Update Nielsen Economic Advisor Series: September 2008 Update Presentation Transcript

  • Nielsen Economic Advisor: What You Need To Know Leading Economic Indicators - Sept 2008 update Todd Hale, SVP, Consumer Shopper Insights James Russo, VP, Marketing as seen on: nielsenwire.com
  • What Leading Indicators Are Telling Us
    • As we head into the last qtr of 2008 and begin to concentrate on 2009, there is a preponderance of datapoints which point to a weakening economy. Front and center is the expanding credit crisis, along with indications or a weakening labor market and wage growth. On the plus side, energy prices have pulled back along with commodity prices which should provide some degree of relief for consumers.
    • The 2Q GDP downward revision to 2.8% is misleading as it is a lagging indicator & reflects the impact of the fiscal stimulus. The significant question is this….as the economy teeters on a brink of a recession, will consumer spending, which hasn’t declined since the 4 th qtr of 1991, head south?
    • Indicators tied to the labor market will continue to be the main driver of this recovery. To that end, the 4-week moving average for weekly unemployment claims is at an uncomfortably high 462,000. These high levels of initial and continuing claims foreshadowing further job losses and rising unemployment rates.
    • Building permits, a sign of new housing activity, declined 40% vs. year ago in August vs down 5% vs. July 2008. One of several signs we are seeing that housing may be hitting a bottom. However, the rebound could be negated by tougher lending practices and a freeze on credit.
    • Despite the negative news on the macro front, CPG companies can target opportunities based upon consumer behavior Nielsen has been analyzing over the past 12 months.
    • Some of Those Are:
      • Widespread Trading Down : From higher-end retailers & brands to value-retailers & brands; from fresh segments to canned & frozen varieties
      • Necessity vs. Discretionary Decision Making
      • Economic Need Driving At Home Trends
      • Consumers Seeking & Responding to Value Solutions : Pricing, Promotion, Functional, Lifestyle
  • Outlook For The Next Six Months: Continued weakening, with potential for major slowdown given the expanding credit crisis Page Positive Neutral Negative Sentiment will dive again with news of bank failures. . Signs of an increasingly weak labor market Qtrly release Exports slowing, as Euro & Asia stalls Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Index of Leading Indicators: Composite of ten indicators Equity Markets (Dow, NASDAQ, S&P) Consumer Expectations Index Building Permits New Factory Orders Capacity Utilization Productivity: Output per man-hour worked Weekly Jobless Claims: 4 wk moving avg Avg weekly hours worked Help wanted Ad Indexes
  • Potentially Dismal Holiday Selling Season
    • Nielsen projects sales over $98 billion, across 125 categories, resulting in a 4.7% gain in dollar sales, however flat to declining unit sales (-0.8%)
      • The 2007 holiday season: actual dollar sales gain of 4.5%.
    • Over a third of consumers spending less, value channels driving traffic.
      • Expected big season for Online, Supercenters, Dollar,Club and Convenience
    • Grocery should also benefit from consumers increasingly combining shopping trips
    • Food, personal care & household basics – not nice-to-haves – will drive strong sales
    • Companies need to be very focused on value & align with “at-home” behavior
  • The Aging Globe Slide For daily news and the latest studies, reports, and whitepapers visit www.nielsenwire.com