U.S. Latino GDP Among Top 10 in The World
The U.S. Latino market is one of the largest, and the fastest growing in the Nation. According to the 2023 LDC Latino GDP Report, the economic contribution of U.S. Latinos was $3.2 trillion in 2023. That figure has more than doubled since 2010, and likely surpassed the $3 trillion mark in 2021.
To put into perspective, if U.S. latinos were an independent country, they would be the fifth largest GDP globally. From 2010 to 2018 the compounded annual growth rate of Latino GDP was 3.3% compared to non-Latino GDP at 1.9%. In other words, the Latino GDP grew 73% faster than non-Latino GDP over this eight year period.
5 Factors Driving The U.S. Latino and Hispanic Market
Clearly the U.S Latino market is a real economic force. In 2021, Latino Purchasing Power was measured at $3.4 trillion. More impressive are the associated growth rates: income grew at a real annualized rate of 4.7% compared to 1.9% for non-Latinos. Consumption and purchasing power also saw impressive growth rates, effectively 2.1-to-2.4 times faster than non-Latino counterparts, highlighting this community’s significant role in propelling the U.S. economy forward. Nationally, Latinos contributed 20.9% of real GDP growth between 2011 and 2021. Measured by GDP, the U.S. Latino economy would rank as the world’s 5th largest. From 2011 to 2021, it was the third-fastest growing among major economies but what exactly is driving the rapid expansion? And more importantly, why should your business care? It turns out, the largest driver of Latino GDP is personal consumption. From 2010 to 2018 Latino consumption increased 133% faster than non-latino consumption. The five factors driving Latino GDP are income, home ownerships, education, household formation and population growth & labor force participation.
The U.S. Latino Market Post Pandemic
Covid-19 brought many challenges including rising unemployment rates, business closures, shutdown of the economy and the list goes on. It is during this time that most people have felt isolated, demoralized and even depressed.
In a study publish earlier this year by Nielsen, hispanic consumers were more likely to be optimistic about a recovery. This positive outlook is consistent with the 44% of latinos that experienced an increase in savings because of covid restrictions. This same group was 2x more likely to buy a home, new vehicle, plan a vacation, dine out at restaurants and visit coffee shops.
How Can Your Business Tap Into The U.S. Latino Market?
One thing’s for certain, businesses that decide to ignore this market segment will fail to gain a large market share of the U.S. Latino community.
It’s time to rethink and tweak your marketing strategy to target a diverse group of customers. Going that extra step to ensure that your business connects at a deeper, cultural level will pay dividends in the long and short term.
Begin by making sure you have a smooth process in place for the buyer’s journey in English and Spanish. There’s nothing worse than missing out on a sale because a customer couldn’t understand, or the process was too complicated.
When you build out your digital campaigns make sure you are also including multiple language translations for your ads to appear in Spanish. This is especially important in areas where there are large populations of hispanics.
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