Undies index takes a hit
If you want to know whether the economy has bottomed out, look no further than the nearest men's underwear drawer.
If men are wearing threadbare jocks - or worse, undies with holes - the nation is in real trouble, according to a growing number of economists who say the condition of men's underwear is a valuable fiscal indicator.
In fact, many argue it is an even more reliable barometer of the state of the economy than the century-old Hemline Index - which suggests women's hemlines rise in good times - and the Lipstick Index - which holds that when times get tough, lipstick sales soar as women seek comfort in affordable, feel-good items.
First touted by former US Federal Reserve chairman Alan Greenspan, the men's underpants index, or Manty Index as some have called it, reasons that because hardly anyone sees men's underpants, it is one of the first things men stop buying in tough economic times.
By extension, the theory also suggests that the pent-up demand means that men's underwear sales should also be among the first to soar when the economy picks up.
In the US, sales of men's underwear were down 12per cent in January. In recent months, sales have levelled off.
And while the Federal Government's stimulus package payments may have provided a one-off boost to local sales of socks and jocks (on $10 10-packs at Woolworths, at least), industry analyst IBISWorld expects men's underwear sales, and thus the economy, will endure more misery before starting to pick up again.
The company estimates the men's underwear sector will drop by 3.6per cent, from about $574.1million in 2008 to $553.2million in 2009.
"What Greenspan says is backed up by economic history because men do tighten their belts more than women during a downturn," says IBISWorld senior analyst Raghu Rajakumar.
"And for most men, fashion is not considered a necessity, and underwear, in particular, seems to be one of the first things men are prepared to cut back on. So what we're expecting is a shift away from men spending on high-end labels like Calvin Klein to middle-market brands, and a decline in overall casual spending on underwear."
Bartender Lindsay Marchment, 19, who hasn't bought a new pair of jocks "for a good 12 months", agrees with the theory. "Underwear is probably one of the first things I'd cut back on because people don't notice if you're wearing good undies or not. As long as you've got one good pair to wear out on Saturday nights, just in case, that's all you need."
His mate, 19-year-old student Joel Boyd, reckons it's been at least a year since he invested in some new smalls.
"I'm watching my money at the moment and I guess I'd rather miss out on a new pair of undies than miss out on something like a night out," Mr Boyd says.
According to Mr Rajakumar, women's underwear sales are a less reliable economic indicator.
"IBISWorld research shows that, historically, women cut spending on discretionary apparel less than men during economic downturns," he says.
"Often there will be a rise in the sale of mid to high-priced intimate apparel as women forgo an expensive 'treat' for a relatively less expensive piece of lingerie."
In New Zealand, the opposite may be true according to Farmers head of marketing Dean Cook. He said the retailer had not observed a decline in the sale of men's underwear, while sales in women's underwear and lingerie had definitely declined on last year.
"If there is an Undies Index in this country, it's more pegged to women's underwear than men's," he said.
"Perhaps women here are more in tune with the economy than men," he added.
As for the 'green shoots' theory, he said sales of lingerie had yet to return to last years levels.
Sean Ashby, of men's underwear brand AussieBum, says while men are dumping "overpriced, designer labels for more affordable, quality brands", he doesn't expect them to stop buying underwear altogether.
"Men know that when they meet that special someone they don't want to look so tight that they can't even afford underwear.
"I think you've got to maintain some self-respect."
- The Age, Additional reporting Businessday.co.nz