Golf and the economy

[microcrayfish]

Not sure if this is the right place to put this but anyway...

Here's a little bit from this: http://business.timesonline.co.uk/to...cle5224295.ece , article on a new golf ball factory being built by Bridgestone in Malaysia.

The golf industry is, of course, awash with interesting economic indicators, and perhaps especially so in Asia. The Nikkei golf index of club membership rates was a classic barometer of Japanese economic rise and decline between ’88 and ’98. Bankruptcy rates among course owners provide a glimpse of the effect of falling (or rising) land prices on corporations.

Equipment sales (clubs, bags, carts etc.) neatly follow bull markets, along with new player numbers and new course developments. Golf ball sales track the actual play rates among the “Sunday golfers” - they are an effective measure of consumer confidence and discretionary spending patterns. Good players lose fewer balls, but probably continue playing through a downturn. Less good players have high replacement rates for balls, and are more likely to treat the game as a dispensable luxury when the purse-strings tighten.

I found it quite interesting that golf was such a reliable indicator of how the economy is doing but what are your thoughts? There's already a sign outside my local range announcing a price increase in the new year on equipment as manufacturers try to sort out their falling profits. Perhaps there'll be a few less posts complaining about slow play with the falling numbers of people playing golf in the near future.

[Fat Slice]

Those indicators work when the income distribution curve remains constant. If, for example, the middle class gets squeezed while the rich prosper, the golf-as-barometer theories don't work as well.

[mako224]

I think you're going to see alot of courses going bankrupt in the next two years. There have already been two in my area shut down or go into forclosure recently.

[mako224]

Those indicators work when the income distribution curve remains constant. If, for example, the middle class gets squeezed while the rich prosper, the golf-as-barometer theories don't work as well.

It is the middle class that drives the golf business. Its not the rich. That's why the golf barometer works so well. I would bet that 80% of golf expenditures are made by people with household incomes under $100,000.

[Spackler-esque]

There's an interesting piece in the Wall Street Journal today that talks about private clubs. The opinion is that something like 20% of privates will either go under or at least no longer be private within the next couple of years.