||Industries Expected to Benefit the Most from the Growing Hispanic Population
By 2016, the Hispanic demographic will comprise 17.8 percent of U.S. residents and, while the nation's buying power is projected to grow 27.5 percent to $14.7 trillion, the Hispanic population's buying power is forecast to grow a whopping 48.1 percent to $1.6 trillion.
IBISWorld analyzed the Hispanic population's contribution to numerous industries between 2011 and 2016 and identified the top 10 U.S. industries in which Hispanic market share is growing the fastest.
Despite difficulties during and following the recession of 2009, buying power among Hispanics continues to escalate steeply. Companies across all sectors are eager to claim a piece of this pie.
According to the IBISWorld study, here are the top 10 industries in which Hispanics' market share of sales is expected to increase the most between 2011 and 2016 (with overall share of spending attributed to Hispanics in 2011 in parentheses) :
1. Consumer Electronics Stores (12.1%)
2. Men's Clothing Stores (12.9%)
3. Children's & Infants' Clothing Stores (19.2%)
4. (tie) Cars & Automobiles (11.8%)
4. (tie) Advertising Agencies (10.2%)
6. (tie) Single Location Full Service Restaurants (11.4%)
6. (tie) Credit Card Processing & Money Transferring (12.0%)
6. (tie) Trade & Technical Schools (12.4%)
9. Department Stores (11.5%)
10. Sports Franchises (7.7%)
Retail industries are some of the main beneficiaries of growing Hispanic buying power. Hispanics are major purchasers of children's and infants' clothing, accounting for about 19.2 percent of industry sales in 2011.
Moreover, according to the Bureau of Labor Statistics, Hispanic men spend 7.0 percent more than non-Hispanic men on clothing on a per capita basis.
In terms of consumer electronics, Hispanics are 7.0 percent more likely than the general population to own a smartphone, download music online, utilize mobile video, use e-mail and send or receive text messages.
Additionally, Hispanics encompass a quickly-expanding share of the market for automobiles. By 2016, Hispanics will contribute roughly $14.0 billion to the car and automobile manufacturing industry, representing annualized growth of 7.4 percent from 2011 to 2016.
Restaurants across all food types have also benefited from the growing Hispanic population. Social factors, such as the tendency to dine out with the entire family, give this group a substantial 11.4 percent share of the single location full-service restaurants industry.
From 2011 to 2016, Hispanic contribution to the credit card processing and money transferring industries will grow at an annualized rate of 7.2 percent, faster than the industry's revenue growth. Credit cards and checking and savings accounts are increasingly being opened by the demographic, thanks to major promotional and development efforts by banks.
Hispanics are leading higher-education enrollment growth among racial groups, according to the Pew Research Center. With a large share of the Hispanic population that has yet to enter college age, the group's contribution to the education sector is projected to grow rapidly over the coming years.
Entertainment providers have long been catering to the Hispanic market, but there is still a lot of room for industries, like sports franchises, to grow. Also, as companies expand their investments in attracting the market, advertising agencies are set to benefit substantially.
(Source: IBISWorld, 10/24/11)
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