Is the technology bubble over?

by Victor Lund on November 18, 2011

In a report released on November 15th, we see that Technology spending may be getting worse this holiday season, but it is not as bad as other sectors.

14% of consumers plan to spend more on technology this year than they did in years past. Unfortunately, 29% intend to spend less on technology than in years past.

The good news is that at 14%, Technology is the leading sector across all industries for increased spending. Books and Apparel come in a close second with 13% intention to spend more. Music and videos did not fair much better with 40% and 44% respectively.

The big loser this holiday season is Jewelry and Video Games and Consoles. With 50% and 49% respectively, around half of consumers plan to spend less on these categories of products.

What is interesting about this Nielson survey is that consumers are planning to tighten their belt this holiday season, and that is not a good thing for the overall economy. As we know in the real estate industry, housing is the primary factor in household budgets, but if they are spending less everywhere else – that tells a story. Consumer confidence is low. We can also extrapolate that when consumer confidence is low, and household spending is being reduced, consumers are less likely to seek housing and automotive purchases.

Granted, we are reading tea leaves here. Other significant economic factors can sway consumer confidence very quickly. For example, if the federal government manages to come out with some good programs to support housing and reduce the federal budget – the stock market may yield higher portfolio values and make people feel like they have a reasonable savings account balance again. The power of a growing 401k and other savings account has a dramatic effect on the spending of retired people, and people nearing retirement.

http://blog.nielsen.com/nielsenwire/wp-content/uploads/2011/11/holiday-shopping_2011.gif
Nielsen article: http://blog.nielsen.com/nielsenwire/consumer/global-holiday-shopping/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NielsenWire+%28Nielsen+Wire%29

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