Study: CE spending to slow in '08

PORT WASHINGTON, N.Y. According to The NPD Group, 2008 is shaping up to be a slow year for consumer electronics. A new study from NPD titled "Entertainment Trends In America" showed that 37% of Americans believe they will spend less on entertainment products and devices in 2008 versus 2007, compared to just 18% who anticipate spending more.

Just under half of respondents to NPD’s survey (46%) thought they would spend about the same amount in 2008 as in the prior year. Teens were the only age group where spending tipped positive; 30% believed they would spend more than last year, versus 25% who thought they would spend less.

“Entertainment has historically been a reasonably recession-proof spending category,” said Russ Crupnick, entertainment industry analyst for NPD, “but in the 2001 recession there were a spate of new gaming platforms, DVD was a relatively new format, and music CDs hadn’t yet suffered the full onslaught of digital downloading. It appears from our recent consumer surveys that the current economic climate might be more challenging for those who make and sell entertainment products.” 

According to NPD, consumers who demonstrated a negative outlook on future spending tended to focus their reasoning on economic factors, such as the increasing price of energy and food. They expressed a clear belief that the economy would get worse, and as a result their finances would be strained, thus causing entertainment spending to suffer. This widely held opinion pervaded all income groups, although predictably it was somewhat less prevalent among households earning more than $100,000 per year.