04-09-2018 Council Work Session Packet

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Mr. Eric Zweber December 19, 2017 WSB & Associates, Inc. Page 35 Trails of Orono Consumer Expenditure Patterns Long Lake Assisted Living Table 18 shows estimated consumer expenditures and average expenditures per households for retail goods and services in Navarre and Orono compared to all of Hennepin County in 2017. Data was obtained from ESRI based on Consumer Expenditure Surveys from the Bureau of La- bor Statistics. V The table shows the average expenditures per household in the Market Area by product or ser- vice. The average expenditure reflects the average amount spent per household, while the total expenditure reflects the aggregate amount spent by all households. In addition, a Spending Po- tential Index (SPI) is illustrated for comparison purposes. The SPI is based on households and represents the annual expenditures for a product or service relative to the national average which is given a benchmark index of 100. An SPI of 115 indicates that the average annual ex- penditure by local consumers is 15% above the national average. Two-thirds of the national economy is driven by consumer spending. Consumer spending is in- fluenced by market conditions and trends. In times of economic troubles, market conditions drive spending patterns toward convenience and necessities, whereas in times of a booming economy consumer trends feature opportunity and luxury items. During the most recent reces- sion, when the housing market began its decline in late 2006 into 2007, consumer spending and consumer confidence followed. Households decreased spending, increased savings, and re- duced credit card debt as many households were faced with job losses. As the nation exited the recession, consumers gained confidence and spending gradually recov- ered. Consumer confidence continues to grow suggesting economic growth with higher con- sumption. The following are key points from the household expenditures table. MAXFIELD RESEARCH AND CONSULTING, LLC