Financial planning encompasses a number of factors. The economies of Perth, WA, Australia and the world could play an important role in how your investments perform. Recently, Andy Gardner, the Australian Resources Analyst on the AMP Capital Fundamental Equities team, wrote a post on the AMP Capital blog exploring the connection between Chinese consumer habits and the Australian economy.
The post was called, “The Chinese consumer shift to experience over ‘things.’” We would like to provide you with some of the highlights.
How Chinese Consumer Attitudes can Affect Australia
Mr Gardner sees a connection between changing Chinese consumer attitudes and the Australian economy. For his broad conclusions, Mr Gardner believes that the Chinese and many others across the globe are beginning to value experiences over material products.*
Mr Gardner sees this trend resulting in a boost for the Australian economy in the tourism, education and housing sectors as Chinese Nationals will be more likely to come to Australia and those who immigrate here will need housing and education.*
According to Mr Gardner, developed markets are trending towards consumers who are spending on experiences which they feel are aligned with their values and lifestyles. This trend is resulting in less money spent on material goods.*
Mr Gardner sees this trend as global. For example, in the US in 2011, revenues for physical products and experiences were almost even. Since then, revenues from experience-based sources are growing at more than twice the rate of those from physical products.*
Why Is This Happening?
Mr Gardner attributes much of this shift to an experience-based generation of millennials becoming the dominant spenders. He also cites that many baby boomers who have retired are spending more time and money on experiences such as eating meals “out.”*
Mr Gardner expects this trend to continue and grow. He sees it as good news for the tourism, property and education sectors.*