03 December 2010 21:57 [Source: ICIS news]
By Ben DuBoseHOUSTON (ICIS)--Early US holiday sales were higher than expected, but underwhelming retail employment numbers released on Friday clouded the outlook for upstream chemicals.
For all retail, 7% more shoppers have made purchases than in the corresponding 2009 period, according to consumer research firm The NPD Group.
The shoppers were surveyed between 26 November - known as “Black Friday”, when retailers slash prices to spur holiday gift buying - and the morning of 30 November. That included “Cyber Monday” sales on 29 November, in which online stores offered major price cuts.
That meshed with initial sales figures available from the US National Retail Federation (NRF), which reported that total Black Friday shoppers increased to 212m in 2010 from 195m, with average spending per person rising 6.4% to $365 (€277) from last year’s $343.
The NRF cited stronger sales of toys and electronics than a year earlier.
Within electronics, chemicals such as polycarbonate (PC) and methyl methacrylate (MMA) are among those that can be found in popular items such as flat-panel televisions, notebook computers and MP3 players.
Other chemicals used include polyvinyl chloride (PVC) for wiring insulation, nylon for electrical components, polyethylene (PE) for packaging and epoxy resins for circuit boards, according to the American Chemistry Council (ACC).
A year-on-year increase in electronics sales would contradict early expectations of a slight decline.
"The positive data from the start to the Christmas shopping season suggests gains in confidence may be translating into an upswing in spending activity," said Kevin Swift, chief economist with the ACC.
However, Friday’s US November employment report was led by a 28,000 month-on-month drop in retail trade jobs, possibly underscoring pessimism by the sector. November retail employment was just 0.4% higher than 2009.
Department stores led the decline, with 8,800 fewer jobs in November than October. Meanwhile, employment in electronics and appliance stores held flat.
“It’s certainly encouraging to see an increase in traffic and sales from the four-day holiday weekend, however, consumers still have concerns about the economy, jobs, and paying down debt,” said Phil Rist, an executive vice president with US-based consumer research firm BIGresearch.
“It was the consumers’ search for deals and bargains that drove the weekend traffic, rather than their confidence in the economy,” he added.
But the amount of impulse buying could represent higher consumer confidence for the future, according to NPD’s Marshal Cohen, chief industry analyst. Cohen noted that 35% of purchasers bought an item for themselves.
“Consumers’ willingness to purchase for themselves is indicative of a more confident consumer,” he said. “This not only bodes well for this holiday season, but for 2011, too.”
Overall spending over the extended US weekend totalled $45bn, or about 10% of the expected seasonal sales.
The NRF earlier projected total 2010 US holiday sales to reach $447.1bn, about 2.3% above 2009 levels. The season extends through Christmas on 25 December.
Market sources noted that any upstream chemical impact would be felt in 2011, when holiday sales from the ongoing season are used as a baseline for projections.
($1 = €0.76)
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