The buying power of Hispanics—now the nation’s largest minority group—will exceed $860 billion in 2007 and is whizzing its way to more than $1.2 trillion five years from now, according to an annual report on minority buying power by the Selig Center for Economic Growth at UGA’s Terry College of Business.
Tracking a similar course, African-American buying power will total $845 billion in 2007 and is projected to top $1.1 trillion by 2012—a 34 percent increase over the five-year period.
Americans of Asian ancestry, representing the third largest minority group, will see their purchasing power grow almost as fast as Hispanics over the next five years. Asian buying power is forecast to grow 45.9 percent, versus 46.3 percent for Hispanics. In dollars, Asian buying power will total $459 billion in 2007, rising to $670 billion by 2012.
To Jeff Humphreys, director of the Selig Center and the report’s author, it doesn’t matter which number you choose, they all point to the same conclusion: The growth is impressive and becoming an increasingly important segment to consumer industries looking to tap into minority markets as a source of revenue growth.
“In 2007, the Hispanic consumer market in the United States is about the same size as Mexico’s entire economy—in terms of its gross domestic product. The same can be said for the size of the African-American consumer market,” Humphreys said. “And I’m becoming convinced the Asian market in America is reaching the point of critical mass, where its economic clout in a number of urban markets is going to create great opportunities for businesses to pay attention to their needs.”
The Selig Center’s annual report includes state-by-state projections of buying power for the nation’s three most populous racial groups (African American, Asian American and American Indian), as well as Hispanics, who the U.S. Census categorizes as an ethnic, not a racial, minority. Buying power is the total personal income available for spending on goods and services after taxes.
Hispanic buying power has risen from $212 billion in 1990 (the beginning boundary of the Selig Center study) to $862 billion in 2007, representing growth of 307 percent over that time. By comparison, the combined buying power of all non-Hispanics in the U.S. grew 125 percent during the same period.