HOUSING, FOOD AND AUTO SPENDING RISE ALONG WITH INCOMES

CE data also reveal what consumers from varying income groups are buying. Increased cost savings from lower energy prices might lead to an increase of spending in these other areas, highlighting potential beneficiaries.

Housing is a common area of increased spending among both low- and high-income consumers. Looking exclusively at the amount of money saved from low oil prices, this factor on its own isn’t likely to push consumers into the purchase of a larger home; however, home improvement retailers and home furnishings stores are potential beneficiaries.

Both low- and high-income consumers also tend to increase spending for food as they move up the income ladder, specifically healthier options such as fresh fruits and vegetables. Higher-income consumers also spend more on dining out, a potential boon for the restaurant industry. Both also spend more on lodging, indicating travel-related industries may stand to benefit.

Retail sales data show building materials, home furnishings, and restaurants generated consistently higher than the average level of retail sales, confirming the trends of higher spending for housing-related items and dining out data. Another area that shows strength over the past few years is motor vehicles, implying the auto industry may also be a beneficiary [Figure 2].

COUNTRIES: HEAVY IMPORTERS BENEFIT

Nations that are heavy importers of oil, rather than producers, are likely to benefit from low prices over time, whereas exporters are more likely to be negatively impacted. Figure 3 shows the five largest importers of oil, along with energy use per capita, which may help us determine how energy usage will change as a country develops.

China and the United States are the two largest importers of oil and stand to benefit, but macroeconomic factors cloud the outlook. Chinese oil demand is down due to a domestic slowdown, and economic risks continue to overshadow potential benefits as broad growth concerns remain at the forefront. In the U.S., growth of the shale oil boom and broader energy industry in recent years remains on watch for spillover effects to the rest of the economy. Rather than a macro tailwind, low oil prices may have a more targeted beneficial impact, such as on consumers, in the current environment.