• marketing
  • communications
  • Hemline index
  • Economic index
  • recession
  • recession indicators

Budgeting, recession and boxers – Recognizing and responding to recession indicators.


With a mini-budget looming and troubling times ahead we look at some of the more interesting  consumer behaviours that can be an indicator of times to come.

Lower pay increases layoffs, cautious spending, rising house prices, and a rise in anxiety are all indicators that a change is coming. But what are some of the stranger things economists have noticed? Can they be used as an accurate indicator of economic struggles? And how can we use these indicators of change to our advantage?

Here are three interesting consumer dynamics that we might learn from.

–  The Hemline Index, demonstrating how fluctuations in the economy are reflected in the length of women’s skirts While this sounds absurd, looking at style trends over time, you can almost convince yourself of its accuracy. In the 1920s, short flapper dresses indicated the free-flowing wealth of the golden age, moving into the lower-cut skirts of the great depression. As the economy rose slowly, so did skirts peaking in the 1960s before plummeting again with the economic crash of 1973, gradually increasing into the nineties and noughties.

With the rise of fast fashion and trend cycles speeding up, the hemline index may have reached obsolescence today, which is, of course, to say it ever had any indicative relevance to begin with. But anyone who has gone through financial issues will tell you that wardrobe updates are the least of their worries.

When communicating with consumers, we must remember that while hemlines may appear more conservative during a financial slump, consumer spending may not follow the same pattern.

–  The men’s underwear index measures discretionary spending to indicate when the economy is beginning to recover from a recession.

In theory, when times are good consumers see men’s underwear as essential and sales are largely stable. However, when the economy is in a in down turn, men no longer want to spend their money on something that isn’t 100% necessary.

Ergo when men’s underwear sales begin to rise again it can signal the end of a recession.

Relying on men to decide to wear underwear may seem irresponsible, but  idea that rises in non-essential purchases like clothing signal the end of a recession is not. In 2022 we have seen a 28% decrease in clothing purchases, the leading cause stated as having less expendable income because of economic slump. However, there’s been a 2% rise in consumer spending on better-value and discounted brands. This means that, more than ever, leveraging the value and the essential nature of your products is key to ensuring consumers feel they can turn to you during times of economic crisis.

–  The Diaper Rash index shows how parents report higher levels of diaper rash among their babies during periods of recession. This is the unfortunate result of parents feeling more concerned about nappy prices and attempting to prolong having to buy a new batch by changing less frequently, inadvertently causing a rise in nappy rash cases among young children. Learning here is that brands should consider  issues that might arise from cost-cutting and place their brand as the solution.

Market indicators are an exciting way to explain consumers’ behaviours and buying habits in times of crisis that could otherwise be dismissed as coincidence. And while correlation does not always equal causation, these patterns of spending show how important it is for marketers to take note of sudden changes in consumer spending and behaviours, as they could signal something far more sinister is to come.


ALL Creative is a leading creative consultancy specialising in health and wellness.  We look to cut through complexity our world and creative powerful creative solutions that cut through all channels.


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