US Consumer Tech Market Shrinks by 6% YoY

The pandemic wreaked havoc in most industries because of the fact that this is the sort of thing that could potentially end up slowing down economic activity by preventing buyers and workers from leaving their homes. In spite of the fact that this is the case, some sectors managed to see surprising growth during the pandemic, such as social media companies. Other tech niches such as that of consumer electronics saw a significant boom in unit sold in the aftermath of the pandemic.

With all of that having been said and now out of the way, it is important to note that the post-pandemic boom appears to be over. According to recent NDP data, it appears that US consumers will be spending about 6% less on consumer electronics and tech than they did last year. Additionally, this data also suggests that the market will shrink further by 2023, with a 3% decline predicted for next year with all things having been considered and taken into account.

However, while the post pandemic surge of 2021 has proven to be short lived, consumer technology spending is still 11% higher than what it was in 2019. That means that the industry has now fully recovered, although its inability to continue this rate of growth might be a discouraging sign for some.

One possible contributing factor to this decline in purchasing is that the market has reached a saturation point. The rise of working from home encouraged consumers to buy various electronic items that they could use to optimize their home based work space. Additionally, widespread lockdowns spurred consumers to splurge on entertainment appliances among numerous other similar products.

Another contributing factor this trend might be inflation. People simply have less money than they did a year ago, and prices are also higher which is putting the squeeze on consumer spending. It will be interesting to see if the predictions hold out, since they would represent an erosion of much of the recovery that the industry has made so far. Continued decreases in sales could force manufacturers to make some hard choices that might impact consumers and workers.

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