Movies make the world go round

Cinema ticket sales could provide a gripping take on how well economies are performing as interest rates continue to rise

August 15, 2023
  • David Rea

With Barbie and Oppenheimer movies both drawing in the crowds, this year's summer of film hits is well underway.

There are, of course, a plethora of ways to take a closer look at the state of major economies – from hotel bookings to restaurant reservations and travel journeys.

But with some moviegoers even double billing (giving rise to the portmanteau of Barbenheimer), let’s cast that night-out at the flicks in a leading economic role for a moment.

Whether downtown, in a shopping mall or at an out-of-town retail park, the popcorn machines have been busy as cinema fans file in. The opening weekend for Barbenheimer saw record takings in the UK and Italy – compared to the same period in previous years – and much higher attendance than average in Germany. In fact, this was the best weekend of the year so far across many markets.

In the global head-to-head, there is a standout winner between these two films: Barbie grossed $382 million against Oppenheimer’s $209 million in the opening week, according to Variety. Where they will stand come the end of the year – and whether they can catch the runaway success of The Super Mario Bros. Movie, with takings of $1.2 billion – remains to be seen.

More broadly however, cinema’s resurgence since the Covid pandemic has been patchy. So what does cinema attendance say about the macro-economic outlook?

In 2022, cinemas were open, but typically saw far lower takings than even the worst years of the previous decade. This year, however, has been better, though still pretty weak. Over the first 29 weekends of the year, box office takings have been above average in only three, four, and six weekends in the UK, Germany, and France respectively.

The film frenzy comes of course, as tightening monetary policy ensues, with debt servicing costs raised and the incentive to save increased, both of which decrease the amount of disposable funds consumers have at a time of rising prices.

We continue to see central banks pursue contrasting monetary policies. The Federal Reserve, Bank of England and European Central Bank all hiked rates in their most recent meetings, while even the Bank of Japan adapted its policy to allow bonds yields to head higher while keeping its key policy rate on hold.

Although inflation is falling, the level of prices as a whole is unlikely to dip, meaning consumers will only get relief if and when wage growth catches back up.

There’s a chance we’re looking through the wrong lens. Even in the U.S., where consumer spending has been bolstered by stimulus checks, cinema has not done as well this year, achieving above the 2010-2019 average in only four weeks of the year so far.

Neverthless, and to continue the filmic analogy, we remain on the edge of our seats.