Americans Expect Their `New Normal` Spending Levels to be 86% of Pre-Recession Levels, According to AlixPartners Poll

Would Translate into a 10% Drop in GDP for Nearly a Decade; Baby Boomers Would
Account for 35% of Total Dollars Saved Post-Recession; Will Necessitate
Businesses to Modify Long-Term Growth Expectations and Cost Structures; 82% Say
They Will Save, Not Spend, Upcoming Stimulus Money

NEW YORK--(Business Wire)--
While American industry is struggling to get through what could become the worst
recession since the Great Depression, Americans say that even after the
recession ends, their spending will return to just 86% of pre-recession levels,
which equates to an approximate 10% drop, or more than $1 trillion annually, in
GDP. They also say this new, lower level of spending is structural and could
last for nearly a decade after the recession ends. The findings are based on an
in-depth economic survey of more than 5,000 Americans released today by
AlixPartners LLP, the global business-advisory firm.

"The future size and shape of virtually every business in America as well as
those businesses that export goods to America rests upon a simple equation: how
much Americans think they need to save versus how much they think they can
afford to spend," said AlixPartners chief executive officer Fred Crawford, "It
would appear that this recession has dramatically altered the mindset of
Americans vis-à-vis that equation-perhaps baby-boomers most of all. And given
that spending by Americans drives approximately 70% of our economy, this massive
reset will result in major changes in the economic landscape of almost every
sector of business, from consumer-facing companies to suppliers of all kinds to
raw-materials companies to financial-services organizations."

Crawford continued, "The companies that prevail in this future economy will be
those that today take proactive action to prepare, action even more dramatic
than many have contemplated thus far. These survey results - and AlixPartners`
institutional experience - strongly point to the need for companies to urgently
examine their underlying business assumptions and strategies and to
significantly retool such core elements as volume projections, product mix,
manufacturing and supply-chain footprint, and general and administrative costs.
And these business-model changes must be accompanied by aggressive cash
management and more conservative capital structures."

On the savings front, the survey revealed that once the recession ends,
Americans plan to save an astounding 14% of their total earnings, with the
replenishment of their 401(k) and other retirement savings leading the way among
their biggest long-term concerns. According to the U.S. Bureau of Economic
Analysis, Americans saved 1.6% of their total earnings in 2008 and just 1.4% on
average for the decade prior.

Said Crawford: "Even if that 14% is inflated by the emotions of the day, which
we think it probably is, our long history at AlixPartners of studying the
behavior of markets suggests that Americans` attitude towards risk, savings and
spending truly has been dramatically reset, to the point that the future may
look more like the early 1980s than the mid-2000s. This has dramatic
ramifications for a broad range of government and social policy, as well as for
business. It is very important that companies understand and plan for what could
be this `new normal.`"

In addition, survey participants estimated that their retirement savings have
dropped an average of 25%, while almost a quarter of those polled (22%) said
they now plan to retire later than previously expected. Among that number, the
expected retirement age jumped up 3.6 years compared with their earlier
expectations: to over age 65, versus about age 61-1/2 before. When asked why
they now expected to retire later, 30% cited loss of savings or retirement.
Meantime, the survey plus additional analysis by AlixPartners revealed that the
huge Baby Boom generation, once thought to be moving into the years in which
they would be spending their retirement savings, may instead be accounting for
more than a third (35%) of total dollars saved by Americans post-recession.

"The Baby Boomers` golden spending years look like they now will be their golden
catch-up years," said Crawford.

Tellingly, 82% of those polled said they would use upcoming government tax
rebates not to stimulate the economy via immediate spending, but instead will
save that money or use it to pay down personal debt. And for those planning to
save the stimulus money, they reported they would be keeping that money in
savings for three years on average.

In terms of which areas of spending will be cut back in the future, Americans
made it clear they feel today`s "back-to-basics" mentality will continue for
years to come. Among the sectors most cited were dining out, vacations,
clothing, autos, home purchases, home improvement and travel. Meantime, 77% of
those surveyed said that even post recession they plan to wait for sales, 66%
said they plan to buy less in general and 58% said they plan to buy
less-expensive things.

Those surveyed were also not sanguine about the futures of the companies for
which they work. Most (69%) said they`re concerned about their employer`s very
survival, and less than half (46%) said they`re confident their company is
taking adequate steps to survive this recession.

About the Survey

The AlixPartners Long-Range Economic Outlook survey was conducted February 19 to
March 3, 2009, with 5,031 people in the U.S. across ten key demographics:
gender, age, location (urban, suburban, rural), region (Northeast, Midwest,
South and West), education, marital status, number of children, employment
status, income level and ethnicity. Participants were asked more than 50
questions. Survey respondents were asked to 1.) provide feedback on current
economic environment, 2.) describe current spending patterns and 3.) estimate
how their saving/spending habits will change once the recession ends.Highlights
of the survey can be found at www.alixpartners.com.

About AlixPartners

AlixPartners is a global business advisory firm offering comprehensive services
to improve corporate performance, execute corporate turnarounds, and provide
litigation consulting and forensic accounting services. It was the recipient of
a record four awards from the Turnaround Management Association in 2008. The
firm has more than 800 professionals in 13 offices across North America, Europe,
and Asia, and is on the Web at www.alixpartners.com.

AlixPartners
Tim Yost, +1-248-204-8689
or
Sard Verbinnen & Co
Drew Brown/Cassandra Bujarski
+1-212-687-8080

Copyright Business Wire 2009