by Ray Keating
August 1, 2018

Walt Disney Company shareholders, CEO Bob Iger, and the company’s employees were, no doubt, pleased to see the report last week that the U.S. economy grew at a 4.1 percent annualized rate in the second quarter of this year. After all, the vast expanse of Disney’s ventures makes it something of a bellwether for the economy.

The 4.1 percent growth rate in the second quarter of this year was the fastest since the third quarter of 2014. The economy’s expansion also accelerated from lackluster growth in the previous two quarters (2.2 percent in the first quarter 2018 and 2.3 percent in the fourth quarter 2017).

Of course, economic growth throughout this economic recovery/expansion that began in mid-2009 has been under-performing compared to the norm. Consider that real GDP growth has averaged only 2.3 percent during the current recovery/expansion, which compares to a post-World War II average growth rate of 3.2 percent, and average growth rate in excess of 4 percent during non-recession years.

The 4.1 percent second quarter growth rate should be celebrated because of its makeup as well. That is, business investment registered strong growth for the sixth consecutive quarter. That’s good news for current and future economic growth. In addition, growth in consumer spending stepped up in the second quarter, which is not surprising given that investment has stepped up and hiring has remained solid. While many experts point out that consumption makes up some two-thirds to 70 percent of the U.S. economy, it must be kept in mind that consumers are followers, that is, they take signals from what business is doing. So, if new businesses are being created, investment is strong, and jobs are being created, then consumers feel more confident, and spending accordingly.

Tying this back to Disney. Like most other U.S. companies, Disney was hit hard during the Great Recession (lasting from December 2007 to mid-2009), with profits hit hard – for example, see this report and this report.

Meanwhile, as noted in a CNBC report at the start of this year, Walt Disney stock has been a top performer among a host of popular stocks examined over a ten-year period, with a $1,000 investment in 2007 worth $2,824 as of October 2017. And year-to-date, Disney’s stock price (as of the morning of August 1) was up by 5.8 percent, just ahead of the gain in the S&P 500.

Taking a look at Disney’s theme park attendance (all numbers based on annual theme park attendance reports by Themed Entertainment Association), a few points are worth noting.

First, Disney’s annual global theme park attendance has increased in each year from 2007 to 2017. That’s noteworthy given the depth of the last recession.

Second, attendance at U.S. theme parks during and around the Great Recession clearly was affected negatively.

Third, it stands out that attendance at Disney theme parks around the world were negative across the board in 2016. According to most analysts and reports, that was due to park price increases reflecting peak attendance times.

Fourth, attendance bounced back nicely in 2017. In fact, Disney’s global park attendance increased by 6.9 percent last year – by far the biggest annual just jump when looking at data going back to 2007. Growth was particularly strong at Animal Kingdom (with the opening of Pandora), Epcot and California Adventure.

If U.S. economic growth remains strong for the rest of this year, that bodes well for Disney in terms of revenues, profits and attendance.

However, it’s worth noting that even during the underwhelming recovery/expansion since mid-2009, we’ve periodically seen economic growth pop above 4 percent, specifically in the fourth quarter of 2011, and during the second and third quarters of 2014. But in each case, growth subsequently slowed. Sustainability has been the issue. In Part II of this analysis, we’ll take a look at what’s changed that gives a boost to the sustainability of stronger growth, and in Part III, what’s working against sustainability.

Ray Keating is the editor, publisher and economist for, and author of the Pastor Stephen Grant novels, with the two latest books being Reagan Country: A Pastor Stephen Grant Novel and Heroes and Villains: A Pastor Stephen Grant Short Story. He can be contacted at