Baked bean sales signal recovery

By Anthony Reuben Business reporter, BBC News

In official statistics and influential surveys, there have been signs that the worst of the recession may be over, and that is reflected in the all-important baked bean sales figures.

Baked bean sales growth has been slowing

In the three months from April to June, baked bean sales were up 15% compared with the same quarter of 2008, according to figures prepared for the BBC by the market researchers Nielsen.

That sounds impressive, but it shows a slowing in the rate of growth.

Every month from November 2008 to May 2009, sales of baked beans grew by about 20%.

Then the brakes were suddenly put on, with growth of only 9.9% in June and 8.7% in July.

Inferior

Sales of supermarket budget lines showed the same slowing of growth, with 18.5% growth between April and June.

TRACKING THE RECESSION This series looks at the developing recession through indicators that are not usually considered. For more details and discussion of the indicators used, see: What are you giving up in the downturn? Is your journey really necessary? The recession's unexpected winners May update

Sales of budget lines had grown by more than 24% each month from September 2008 compared with the same month the previous year, but then tailed off from April, and only grew 10.5% in July.

Both baked beans and budget lines are what economists describe as inferior goods, because people tend to buy more of them when they have less money, so a slowing in the growth of their sales may be seen as a sign that people think the recession is easing.

The opposite appears to be true of organic food, sales of which have been in a fairly steady decline since the start of the recession.

They fell again, by 12.9% between April and June compared with the same period last year.

Olive oil sales have been jumping about throughout the recession, being seen, on the one hand, as a luxury product for which there are cheaper alternatives.

But on the other hand, it has benefited from people cooking at home more - and so being prepared to spend a little extra on ingredients.

Paint sales

There is another sign of potential recovery in sales of emulsion paint, which are seen as a good indicator of the state of the DIY market as well as the state of the housing market.

PAINT SALES 41,049,000 litres of emulsion paint sold in the UK April to June Up 16.2% from the same quarter of 2008 Source: GfK Retail and Technology

People tend to buy emulsion paint both to do up their houses before selling them and to personalise a new house if they buy one.

Emulsion sales have been consistently falling for months. Between the start of 2008 and the end of March 2009, there were only two months in which more paint was sold than had been in the same month of the previous year.

Then in April, sales suddenly improved, with sales in the three months from April to June rising 16.2% compared with the same quarter of 2008.

"The fact that paint is growing is a very good sign because it shows that people are putting money into their houses," says Stephan Lamouroux, an expert on the DIY market at GfK.

But he warns that it does not necessarily mean that the housing market is about to take off.

"There are still segments in the DIY market that are declining, such as power tools, which tend to be linked to bigger DIY projects," he says.

So it may be that people are buying paint because it is a relatively cheap way of improving your home, but are still not feeling good enough to spend money on bigger renovations.

There is some support from our unusual indicators such as baked beans, budget lines and paint, for the more conventional indicators that suggest the economy may have bottomed out.

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