The Insatiable Appetite for Things
Despite the feeling that ZOOM, NETFLIX, DoorDash, and remote learning might convey not everything during the pandemic shifted online. We also developed an insatiable hunger for real world things like furniture to the home office, new cars, homes, decks, and even Croc shoes.
Typically recessions bring with it a contraction on the consumption of durable goods, things like home furniture, and therefore a contraction in imports, reduction in manufacturing orders, and a reduction in trade deficits. In economic terms the shock the economy is getting out of can hardly be compared with previous recessions since it also came with an increase in demand for some goods and typically recessions mean decrease in demand for all goods. This insatiable demand for goods represent an opportunity for minorities if it becomes accessible.
Data collected by the Federal Reserve does show that the demand of goods is being serviced by both imports from abroad and domestic production. Given the current environment it seems people are shifting the consumption from “experiential items” to real items, people intentionally consuming less trips and more on durable goods such as homes and cars.
This might represents an opportunity for Hispanics and other minorities if our businesses are able to migrate to manufacturing intensive industries, currently Hispanics tend to be concentrated on services given services need less capital and capital is scarce for minorities. The next quarters will be decisive as travel opens up and the entertainment industry reopens since it will test if this trend for increase demand in durable goods will remain and if such trend will be beneficial for imported goods or for domestically produced goods.