It's the ECONOMY... stupid! An over used cliche in my opinion, but today this silly phrase has real resonance and meaning. If your watching the news or financial channels or listening to the Presidential primary debates the message is pretty clear - what to do about the slowing economy? Did the housing bubble bursting cause this? Is a recession looming?
For what its worth, technically speaking, a recession is 2 consecutive quarters, or 6 months, of negative GDP growth. Some people describe it as 2 consecutive quarters where consumer confidence is below 100. This is a broad based national average and doesn't necessarily reflect the sentiments and feelings of every consumer. But it is important since it is one of the indicators economists use in predicting a recession.
For what its worth, technically speaking, a recession is 2 consecutive quarters, or 6 months, of negative GDP growth. Some people describe it as 2 consecutive quarters where consumer confidence is below 100. This is a broad based national average and doesn't necessarily reflect the sentiments and feelings of every consumer. But it is important since it is one of the indicators economists use in predicting a recession.
While I'm definitely not an economic expert, I try and keep a keen ear to the ground to understand what is happening. It's no secret that the cost of things like food, gas, raw materials and other necessities is rising. Economists measure these cost as the CPI or Consumer Price Index. These are costs most of us feel directly day to day. The weak US dollar doesn't help rising costs either as many of the goods we purchase are imported making them more expensive. It also makes going to Mexico or Europe for vacation unappealing from a cost standpoint.
The CPI
These rising costs make me feel uneasy about spending. Maybe I won't buy that new car this year, rather just spend the money on some maintenance. Since I carry weakened greenbacks, perhaps I should postpone an overseas vacation this year and take a quick weekend at the Oregon Coast instead. This feeling I have about my personal economic situation is tracked by economists as well. It is measured by the CCI the Consumer Confidence Index or Consumer sentiment.
The CCI
When economists look at the two, the CPI is increasing and the CCI is decreasing. This means consumer money available to spend is tightening and the money that they do have they are less likely to spend. AND since economists say that the consumer represents 70% of US economic activity the combination of the two are key indicators of a looming recessionary period.
The CPI
These rising costs make me feel uneasy about spending. Maybe I won't buy that new car this year, rather just spend the money on some maintenance. Since I carry weakened greenbacks, perhaps I should postpone an overseas vacation this year and take a quick weekend at the Oregon Coast instead. This feeling I have about my personal economic situation is tracked by economists as well. It is measured by the CCI the Consumer Confidence Index or Consumer sentiment.
The CCI
When economists look at the two, the CPI is increasing and the CCI is decreasing. This means consumer money available to spend is tightening and the money that they do have they are less likely to spend. AND since economists say that the consumer represents 70% of US economic activity the combination of the two are key indicators of a looming recessionary period.
To be fair, since December I attended two separate presentations by well known economists. I will attend a 3rd presentation in February. This is how I came about much of this information, but it is readily available on the web. The message is, that these indicators and others suggest that we are 50 - 50% likely heading toward a recession. Recently the Federal Government outlined a $150 billion Economic Stimulus Package that was presented to congress. This is a response to unfavorable trends and indicators, so you can safely assume that they see a recession coming too. Or at the very least an economic downturn.
The Train.... or is it?
So the question on everyone's mind who reads this blog is this. WHAT DOES THIS HAVE TO DO WITH AIRBRUSHING? Well if you think about it, everything. As a company, Iwata Medea has to be smarter and more astute with things like budgets, cash and inventory. Similarly we sell to businesses who have similar functions and constraints in regards to budgets, cash and inventory. In turn they sell to professional and amateur artists who have the same concerns, etc. So when you see the channel in its entirety it becomes pretty clear how a recession or economic downturn effects everything. But is this a bad thing?
Victor Hugo once said, "Necessity is the mother of invention." In my 21 years in the airbrush market I've have witnessed the incredible creativity and resilient nature of the airbrush user. I've been around long enough to know of:
- the early days of photo retouching with airbrush
- the van mural days of the 7o's
- the great airbrush illustration period in the 80's
- the mania around T-Shirt and "mall" airbrushing
- the airbrush fingernail days
- the body art bonanza
- the airbrush tanning faze
- and the renaissance of the van mural days but now with a more pronounced Custom Painting on bikes and cars craze
At some point all of these "airbrush happenings" lost some steam and wider appeal. And the bounty of work associated with these periods also went away. In many cases, only a few niche players are still left standing. As markets became old and fads and trends subsided, new markets were being born.
From my perspective, this uncertainty in our economy is an exciting opportunity for those who are well prepared. Think about it, there are so many other opportunities to paint and use artistic talents to create all types of new things. For example, professional custom painter Mike Lavallee is crafting and creating a new product called F-Bombs. These are great little works of art that are fun to create and have appealing resale value. In the past, Mike also had even done some custom painted PC cases for Dell! Automotive painting guru Craig Fraser is doing work with guitar companies and even doing tattoos! Renowned Hawaiian Custom Painter Dennis Mathewson is delving into the Fine Art market with great success! Simply put, they are all diversifying, creating other niches for their creative output. They are creating demand in some ways where none existed!
Objects d'arte!
The point I'm trying to make is that in spite of what you may hear and read, trust your instincts and use your creativity. In the hands of a creative professional an airbrush and a jar of paint can transform any object into a work of art.
The Train.... or is it?
So the question on everyone's mind who reads this blog is this. WHAT DOES THIS HAVE TO DO WITH AIRBRUSHING? Well if you think about it, everything. As a company, Iwata Medea has to be smarter and more astute with things like budgets, cash and inventory. Similarly we sell to businesses who have similar functions and constraints in regards to budgets, cash and inventory. In turn they sell to professional and amateur artists who have the same concerns, etc. So when you see the channel in its entirety it becomes pretty clear how a recession or economic downturn effects everything. But is this a bad thing?
Victor Hugo once said, "Necessity is the mother of invention." In my 21 years in the airbrush market I've have witnessed the incredible creativity and resilient nature of the airbrush user. I've been around long enough to know of:
- the early days of photo retouching with airbrush
- the van mural days of the 7o's
- the great airbrush illustration period in the 80's
- the mania around T-Shirt and "mall" airbrushing
- the airbrush fingernail days
- the body art bonanza
- the airbrush tanning faze
- and the renaissance of the van mural days but now with a more pronounced Custom Painting on bikes and cars craze
At some point all of these "airbrush happenings" lost some steam and wider appeal. And the bounty of work associated with these periods also went away. In many cases, only a few niche players are still left standing. As markets became old and fads and trends subsided, new markets were being born.
From my perspective, this uncertainty in our economy is an exciting opportunity for those who are well prepared. Think about it, there are so many other opportunities to paint and use artistic talents to create all types of new things. For example, professional custom painter Mike Lavallee is crafting and creating a new product called F-Bombs. These are great little works of art that are fun to create and have appealing resale value. In the past, Mike also had even done some custom painted PC cases for Dell! Automotive painting guru Craig Fraser is doing work with guitar companies and even doing tattoos! Renowned Hawaiian Custom Painter Dennis Mathewson is delving into the Fine Art market with great success! Simply put, they are all diversifying, creating other niches for their creative output. They are creating demand in some ways where none existed!
Objects d'arte!
The point I'm trying to make is that in spite of what you may hear and read, trust your instincts and use your creativity. In the hands of a creative professional an airbrush and a jar of paint can transform any object into a work of art.
Hopefully at the end of 2008 we will all be saying to ourselves, that was light at the end of the tunnel and not a train. The next great ride for the airbrush has yet to be discovered!
2 comments:
Have you explored the supply and demand curves based on the elasticity of the airbrush category? How is Iwata/Medea responding in correlation to this elasticity? I would be interested in your findings.
Great question! The problem is our industry is very small and there is no public info. So it would be hard to quantify as to whether the market is growing, shrinking or if its market share battles.
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