Are Consumer Non-durables A Good Career Option?
Is a career in consumer non-durables a good choice? To decide that, you’d first need to understand what durables and nondurables are. Moreover, how economic ups and downs have impacted these fields and what it can mean for your career choice.
What are durables?
Simply put, durables are items that we don’t buy frequently. Meanwhile, consumer non-durables are items that expire soon. If it lasts longer than three years, it’s a durable good. On the other hand, if it lasts less than three years, it’s a consumer non–durable good. The Bureau of the Census releases orders every month as an economic indicator. It shows fresh orders for factory goods placed with domestic manufacturers.
What are some examples?
A hard good is a sweet that lasts a long time. It provides value over time rather than being consumed all at once. For example, you can deem bricks durable because they should never wear out. We can also define durables as products that last for a long time between purchases. Some other examples include automobiles, household appliances, consumer electronics, furniture, sporting items, weapons, and toys. When durable goods are selling well, it usually means the economy is doing well. On the other hand, when sales are down, so is the economy’s health.
What are consumer non-durables?
The other durables are consumer non-durables or dry goods. You can consider them as consumables. We can characterize them as things that we use once and then discard. Moreover, these things have a lifespan of fewer than three years. These include cosmetics, cleaning goods, food, fuel, beer, cigarettes, paper products, rubber, textiles, apparel, and footwear.
You can both lease as well as purchase durables. Meanwhile, consumer non-durables are rarely rented. Buying durables falls under the area of product demand. Whereas, purchasing consumer non-durables falls under the category of product consumption. What kind of shopper are you?
Consumer durables and non-durables products economics
Consumer spending does not follow a predictable pattern. During a recession, spending can decrease throughout the recession. It changes at various points during the downturn, or not at all. Economic expansions follow the same pattern. PCE took 11 quarters to reach its peak in Q4 2007. It was quite longer than the previous seven recessions since 1959. Given the magnitude of the economic recession from 2007 to 2009, this is not surprising. However, in terms of total PCE growth, the past recession was a wash.
In subsequent recovery
Consumer spending increased by 28.7% between Q2 2009 and Q4 2019. It was far slower than the economic expansions of Q1 1961 and Q4 1969, and Q1 1991 and Q1 2001. Not only does the total amount of consumer spending increase with time, but so does the rate of increase. Recessions have hit durables harder than nondurable goods consumption.
Even in a downturn, consumers spend on food. But, they can postpone the idea of buying a replacement car due to economic uncertainty. For example, between Q4 2007 and Q2 2009, during the last recession, PCE on autos and parts decreased by 21.3%. It was a much sharper drop than the 2.9% decline in food and beverage expenses for off-premise consumption during the same period. Moreover, economic downturns affect services less than products durable and consumer non-durables.
The last recession
During the past recession, PCE on services increased by 0.2%. It happened despite decreases in expenditure on durable and nondurable commodities. However, durable goods consumption suffers the most during a downturn. It also recovers faster than other sectors in the following economic rebound. For instance, consumer expenditure on durable goods and services increased by 89.2% between Q2 2009 and Q4 2019. It was far above the corresponding growth in spending on nondurable products and services during the same period.
The best recovery
The best recovery in the last 60 years was between Q1 1991 and Q1 2001, followed by one between Q1 1961 and Q4 1969. We look at the time since 1990 to see how spending varies across different types of durables, nondurable commodities, and services during business cycles.
Automobiles and parts are an important portion of PCE on durables. During the recession of Q3 1990–Q1 1991, when spending decreased by 6.4% on average per quarter, this category suffered a big impact. In fact, that rate of shrinkage is the fastest of any recession since 1947. Moreover, within the last three recessions, spending on recreational products has dropped the least. Clothing and footwear had the fastest rate of spending decrease among nondurable products. Also, within services, spending on food, lodging, transportation, and recreation has decreased in each of the previous three recessions.
What is Consumer Goods?
Consumer products are items that we buy to use at home, at school, or for recreational or personal purposes. We can put them into three categories: durables, nondurables, and services. Durables are goods that have a long lifespan. We use them often. Some examples are bicycles and refrigerators. Nondurable items have a three-year lifespan and we consume them quickly. For example, food and beverages products.
Auto repairs and haircuts are among the services offered. They represent the final output of time-consuming production processes. Therefore, commodities are also known as final good, ss, or outcome. To supply commodities that can be purchased, entrepreneurs and enterprises mix capital goods, labor from workers, and raw resources. Additionally, producer products are goods that we use in the manufacturing process. However, those are not marketed to the general public.
In 1972, the Buyer Product Safety Act was enacted to regulate the selling of the most common commodity. The Act establishes the US Consumer Product Safety Commission. It’s a body of five nominated professionals charged with overseeing product safety and issuing product recalls for existing products.
These inputs are highly important if you’re looking forward to learning and making a career in this industry.
