Secrets of the Catalog Master
Vol. MMVI No. 4 July 2006
(Continued--page 2)
The Third Quarter 2006 Regional Economic Outlook
The third quarter of 2006 may show some slowing effects due to inflation and the fatigue of oil prices and the growing dissatisfaction with the nation’s directions. While economic growth continues in all regions, there is a bit of wilting appearing in the summer months, and it’s not all due to the heat.
The U.S. economy has continued its expansion through June, but high energy costs are driving manufacturing price increases as well as some retail price moves. An increase in passing along price increases is seen in most of the country.
Additional increases in interest rates are expected, perhaps two more quarter point boosts. The primary drivers of inflation are fuels, metals, petroleum-based products, and building materials.
Labor markets continue to tighten and wages continue to edge upward. Some wage pressures were moderating slightly in the Midwest. For direct marketers, wage pressure appears to be mounting with salaries for ecom personnel hitting all-time highs.
The cooling housing market may be offset with a strong commercial real estate market. If business expansion slows, though so will the commercial growth.
Economic growth slowed in five out of twelve regions, but not enough to move those regions to a slow outlook. None of the twelve regions have dipped enough in economic performance to be moved to the Slower column; all continue primarily as stable.
For multichannel marketers, the first six months of 2006 have been quite positive and projections have by and large been exceeded in both business-to-business and business-to-consumer operations. The early indicators of slowing are being seen: drops in housing starts; auto sales declines; reductions in consumer spending; drops in factory orders. The last half of 2006 may not be quite as robust as the first half. Yet, online sales continue to grow in both consumer and business-to-business marketing.
Signs of Regional Stability or Status Quo
Region One (CT, ME, MA, NH, RI, VT)
Region Two (NY, NJ, CT, PR, VI)
Region Three (PA, NJ, DE)
Region Four (OH, KY, PA, WV)
Region Five (KY, MD, TN, VA, NC, SC)
Region Six (GA, AL, FL, LA, MS, TN)
Region Seven (IL, IN, MI, WI, IA)
Region Eight (MO, IL, IN, KY, TN, LA, AR)
Region Nine (MN, WI, ND, SD, MT, MI)
Region Ten (KS, CO, MO, NE, NM, OK, WY)
Region Eleven (TX, LA, NM)
Region Twelve (CA, UT, AZ, NM, OR, WA)
Slower (Individual states)
Louisiana
Mississippi
The Third Quarter 2006 Circulation and Prospecting Outlook and Recommendations
and Recommendations
Synopsis
The short-term economic outlook for the catalog industry continues positive. The intermediate-term outlook remains positive for the second half of 2006, and the long-term outlook through 2007 remains positive.
Continue Prospecting
Continue with normal strategies for circulation and prospecting plans. There are no substantive economic reasons for any cuts in prospecting or reductions in customer circulation. Keep mailing, emailing, telephoning and searching at normal to increased levels.
Nation At A Glance
Continue with normal strategies for circulation and prospecting plans. There are no substantive economic reasons for any cuts in prospecting or reductions in customer circulation. Keep mailing, emailing, telephoning and searching at normal to increased levels.
