UK economy set for royal baby boom as consumers celebrate

British public forecast to spend some £250m as arrival of royal newborn gets consumers in party mood. And long-term outlook should also benefit as country basks in worldwide exposure generated by the happy event.

Japan's Takashimaya department store displays figurines commemorating the upcoming royal birth in Tokyo. Yoshikazu Tsuno / AFP
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The birth of a new royal baby in Britain is set to inject hundreds of millions of pounds into the United Kingdom's struggling economy, while stimulating a worldwide trade in royal memorabilia.

As well as providing the UK's Conservative government with a welcome distraction from the country's ongoing policy of economic austerity, the Duke and Duchess of Cambridge, Prince William and his wife formerly Kate Middleton's happy news is also expected to prompt a surge in consumer spending.

UK consumers alone are set to spend about £250 million (Dh1.4 billion) as a result of the royal birth. But the arrival is also expected to generate significant international sales.

Overseas manufacturers, such as those based in developing economies including China, have for months been in a pre-sprinting position over the gender of the royal baby.

Tangshan Hengrui Ceramics, for example, which produced 50,000 commemorative plates to mark William and Kate's marriage, is geared up to fast-track the production of commemorative items to be shipped as soon as possible after the royal birth.

The couple's new baby is also expected to provide a tremendous fillip to the British tourist industry by increasing international interest in the UK monarchy and its cultural heritage. Industry analysts estimate the value to the tourist industry in hundreds of millions of pounds, although this is a much harder figure to quantify than domestic retail expenditure.

Money spent on the food and drink by British royalists celebrating the birth is predicted to total £87m, while commemorative items such as china will provide an additional boost of almost £60m to the economy, the UK-based Centre for Retail Research (CRR) says. It also predicts increased sales of toys, books and DVDs will give retailers an additional £80m.

But the figure for overall sales would be much higher if international sales of memorabilia, an almost impossible figure for analysts to quantify, were taken into account.

"There are many British suppliers of commemoratives, souvenirs, nursery equipment, prams, pushchairs and babywear who have been working flat-out for the past six months, intending to use the royal baby not simply to sell more product but as part of a strategy to expand all sales into mainland Europe, North America and other markets," says Professor Joshua Bamfield, the director of the Centre for Retail Research.

There are also indications of a mushrooming global market for royal memorabilia that increasingly involves non-UK manufacturers supplying markets outside Britain.

"Many producers are overseas and will benefit by supplying their export market," says Prof Bamfield.

But primarily the birth will provide a much-needed boost to UK-based manufacturers.

"Part of manufacturing is now returning to the UK and the economics of UK production are more finely-balanced than they were, say, 10 years ago," says Prof Bamfield.

The family-run, UK-based china designer Sophie Allport, for example, hedged its bets on the baby's gender by designing two mugs: a pink one for a girl and a blue one in case the third-in-line is male.

"We have already taken pre-orders from our trade customers in the thousands and retail customers can register their interest on our website ... The fine bone china mugs are being hand-decorated and finished in Stoke on Trent," says the Sophie Allport spokeswoman Pippa Rymer.

"We are expecting the overseas sales of the royal baby mug to be quite high," adds Ms Rymer, saying the company has already received orders via its website from countries including the UAE.

According to the CRR, many retail brands have been associating themselves with the royal birth. Mothercare, for example, has a new pram under wraps that has been designed along the lines of a scaled-down royal horse carriage.

Pram manufacture, in particular, is expected to receive a huge boost both in the UK and overseas as parents of new babies flock to buy carriages similar to those owned by the royal couple.

High-profile births traditionally spark increased sales of baby items; when the British footballer David Beckham and his wife Victoria chose the iCandy Peach baby carriage for their daughter in 2011, sales of the model almost tripled that year compared with 2009, growing from £3.6m to £9.6m.

The CRR predicts the maker of the royal couple's choice, which is rumoured to be a light blue Bugaboo, can expect sales to rocket in what it says could be the most lucrative product endorsement of the year. Overall, the birth will push up the sale of prams and pushchairs in the UK by 13 per cent over the next year.

VisitBritain, the brand name used by the British tourist authority, believes the royal birth will be significant in attracting visitors to the UK.

"There is certainly a heightened global interest in the birth and having a living royal family gets us an enormous amount of free advertising for Britain around the world," says the VisitBritain spokesman David Leslie.

He adds while much of the global media is often focused on London's Buckingham Palace, other UK tourist locations also stand to benefit from the royal birth.

"I think what we're benefiting from as well, is the fact that William and Kate have really given us a great romance of Britain - meeting at St Andrews in Scotland, living off the coast of Wales on Anglesey and now preparing for family life at Kensington Palace and in Norfolk," says Mr Leslie.

According to VisitBritain, international interest in the royal family accounts for a significant proportion of the £4.5 billion spent each year by visitors drawn by the UK's culture and heritage.

When combined with the hundreds of millions of pounds spent in the UK and abroad on consumer items and food and drink, it is evident that the royal birth will have a major positive economic impact in the UK and elsewhere.

It's not just William and Kate who will be crying tears of joy.