Black buying power is on the rise in a good portion of the country.
Purchasing power of black consumers is steadily on the rise, and it's growing in the most unlikely places.
Although the majority of blacks today still live and spend in the South, that might be starting to change, according to a report from the University of Georgia's Selig Center for Economic Growth.
The study called, "Buying Power at the Beginning of a New Century: Projections for 2000 and 2001," found that the consumer markets experiencing the fastest growth are actually in the Midwest and the West. For example, in Nevada, African American buying power increased by a whopping 176 percent between 1999 and 2001. In Arizona, that figure soared 156 percent during the same time period, while Colorado saw its black buying power rise by 134.4 percent. South Dakota and Utah are also states that made the list of fast-growing black consumer markets.
Are black consumers abandoning New York City and Atlanta in favor of the heartland? Not exactly, says Dr. Jeffrey Humphreys, director of the Selig Center and of economic forecasting at the Terry College of Business at the University of Georgia. "Typically, if you rank states by market size, smaller markets are growth leaders because it's easier to post larger gains if you have a small base," he says.
The job-creating hot economy has also played a role. As companies in these states seek to fill jobs, and qualified blacks fill the positions, this creates a substantial bump in the numbers of blacks in a particular state. The economy is also what's behind a substantial spike in black buying power - which increased 86 percent over the past 10 years, to $572.1 billion, according to the Selig Center. Among blacks, income and entrepreneurship rates have risen; unemployment and poverty rates have dipped to historic lows.
There are also national migration patterns at work, points out Roderick Harrison, director of DataBank at the Joint Center for Political and Economic Studies in Washington, D.C. "Blacks are moving to metro areas of some Southwestern states, which are the fastest growing area in the country," he says. Areas experiencing rapid growth will find themselves with a growing black population, even if they lack a substantial number of black residents today, he says.
But if you're looking for sizable black consumer markets over the next five years, don't look at growth percentages - look at raw numbers, advises Harrison. His projections through 2005 indicate that fast-growing states such as North Carolina and Maryland, will each add about 120,000 blacks in the next five years. States with large black populations such as Georgia, Florida, and Texas will each add nearly a quarter million more blacks, says Harrison. States with impressive percentage increases in black buying power, such as Colorado, Arizona, and Nevada will only add between 21,000 to 30,000 black consumers each, Harrison adds.
Yet, for marketers in search of new black markets to tap, it's a good idea to get in early with the nascent black market in Midwestern and Western states, says the Selig Center's Humphreys. And although it is more expensive for sellers to target relatively small numbers of consumers, today's precision marketing tactics make that obstacle less problematic. "It's important to make an attempt in these fast-growing states - there's a tremendous amount of potential," he says.
For more information call (706) 542-4085 or visit www.selig.uga.edu.