A Slice of One State’s Growing Hispanic Consumer Market
Andrzej Zwaniecki, writing for Bureau of International Information Programs, part of the U.S. Department of State, says “When Peoples Bancorp of North Carolina noticed explosive growth in the state’s Hispanic population – now nearly 600,000 strong and 7 percent of the state’s residents – it saw an opportunity.”
The bank decided to do something a bit deeper than add Spanish-language signs and some bilingual tellers to its employees. Instead, they started up a new subsidiary, Banco de la Gente so they could target Latino customers.
Peoples Bancorp of North Carolina has branches in areas that have a fast-rising hispanic population – around Charlotte and Raleigh-Durham.
Banco de la Gente operates differently to its parent, allowing for some special needs of the Hispanic community. Extended hours, a choice of remittance methods and accounts with disability insurance are included in the lineup.
The University of North Carolina says the Hispanic population in North Carolina is mainly of Mexican origin, and that population contributed more than $9 billion to the state’s economy in 2004 through “purchases, taxes and labor.” The net cost to the North Carolina was only $61 million, according to a University report, which also projects a doubling of the benefit to the state, of $18 billion.
Hispanics now contribute a majority of workers in the construction industry, according to the report. “Even French restaurants have Mexican chefs,” John Kasarda, report co-author, said.
The report does not say how Americans have been negatively impacted by the presence of so many hispanics. Many of these workers are likely to be illegal. The University report notes that annual construction labour costs would have been nearly $1 billion higher, if not for the Hispanics.
North Carolina is just one state where Hispanics are contributing substantially to local economies and in return seeing their buying power soar. Similar trends are occurring across much of the United States, whetting business appetites for a bite of the $951 billion that represents the buying power, or disposable income, held by U.S. Hispanics in 2008.
Hispanic disposable income and purchasing power has been increasing and it continues to do so. Andrzej Zwaniecki notes that “The University of Georgia’s Selig Center for Economic Growth predicts that Hispanics will possess disposable income of more than $1 trillion by 2010 and will continue seeing that buying power grow far into the future because the U.S. Hispanic community has the highest birth rate in the country.”
Chiqui Cartagena, the author of Latino Boom, a book about the Hispanic market, said U.S. Hispanics will make up 40 percent of new home buyers over the next 20 years.
Zwaniecki also says The 2007 National Association of Home Builders’ housing survey shows Hispanics made up 10 percent of new home buyers, and the book Latino Boom projects that 40 percent of new home buyers over the next 20 years will be Hispanic.
See the Kenan-Flagler Business School study for more information.
