Published on Monday, May 6, 2024
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A deceleration of job gains and tight lending standards are among the reasons.
Colliers is predicting a slowdown in consumer spending in 2024, with overall growth slower than in 2023, according to its Spring 2024 Retail Report.
Anjee Solanki, National Director, Retail Services & Practice Groups, US, said this could have a profound impact on retailer strategies, as consumers are likely to form resiliency by being judicious with their spending dollars.
“Other factors may come into play as household incomes fluctuate and the aging population—baby boomers and retirees—maintain their spending habits despite higher interest rates,” Solanki said in prepared remarks.
Rising real incomes and consumer spending growth are forecast to average 2.3% across all metros in 2024, replicating the outturn from 2023, which supports its opinion.
Holding consumer spending back will be a deceleration of job gains and lending standards that will remain tight.
“The macroeconomic landscape in 2024 is anticipated to be challenging and uncertain,” according to the report.
Subdued employment expansion, restrictive credit conditions, and fiscal consolidation are other key obstacles. Colliers said real household consumption expenditures are expected to grow by 1.7% in 2024, compared to 2% in 2023.
The fastest growth will be seen in the Pacific, South, Southwest, and Mountain states due to its mix of strong demographics. Colliers sees San Jose, Orlando, Austin, and Boulder as achieving “the most heightened disposable incomes and consumer spending.”
The firm said to look out for the 65+ age group, which “represents a vibrant demographic—often referred to as the “young, old.”
This group has defied higher interest rates, having increased their spending, and now accounts for 40% of all consumer spending.
Meanwhile, food and drink and housing will see the slowest growth, the report said.
For the 2024 to 2828 range, prospects are for 1.7% growth. And for 2024 to 2050, Colliers said a slowdown in population growth across major metros will result in moderating, rising by about 1.7%.