NASCAR – A Leading Economic Indicator?

Wednesday, July 27, 2011
Dr. Doug Blais, Chair, Sport Management




Is NASCAR a leading economic indicator for the U.S. economy?  Leading economic indicators include everything from retail sales figures, employment statistics to consumer confidence.  Are attendance and the overall health of NASCAR as good an indicator? When the economy went into recession so did NASCAR. As the economy continued to decline, NASCAR saw attendance at Sprint Cup races drop to 3.6 million, down 16% from 2008. 

Economic indicators continue to be mixed. Unemployment continues to hover around 9%, retail sales are stronger however, consumer confidence continues to decline. Add in the fact that Standard & Poor’s has placed the U.S. on “credit watch” and the average NASCAR fans are hesitant to open up their wallets and spend over $500 to attend a race. 

The average NASCAR fan travels 250 miles to attend a race. With gas prices around $3.65 per gallon there is a psychological barrier to overcome.  Fans are asking themselves, “can we afford gas, tickets, parking, souvenirs, and food?”

NASCAR has seen an average attendance increase in its first 13 races to 111,533 from 102,592 last year. While still below the 2008 figures, this is a good sign for NASCAR and the economy.  This increase indicates that the average fan feels more secure with employment status and the future of the economy overall. The income distribution of NASCAR fans closely mirrors that of the overall U.S. population with 20% making less than $30,000 and 25% making between $30,000 - $50,000.
 
Fans attending these races may not be spending as much on souvenirs and may even choose commuting rather than staying over in a hotel. The key, however, is that they are attending.  A Sprint Cup weekend can generate $100-$200 million for the local/regional economy.  This is a vital economic engine for the surrounding communities. For example, the economic impact of the two Sprint Cup races at New Hampshire Motor Speedway adds $179 million in spending, $103 million in income, and the creation of $2,500 jobs.

NASCAR continues to be out in front in an effort to maintain this attendance increase. It is implementing various strategic initiatives that include the development of a youth website, marketing to Hispanic fans, and a more aggressive social media outreach. 

NASCAR is still the number one sport for brand loyalty and consistently draws over 100,000 fans to events.  Like the economy, change does not occur overnight.  Bumps will be felt on the road to recovery.  NASCAR is in a strong position to capitalize as the economy slowly recovers.  Let’s watch to see if NASCAR will be the leading economic indicator.

 

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