Spending More for Christmas

Spending on Christmas trees in the U.S. will rise 3.1 percent this year to $3.4 billion, the highest since before the recession in 2008, as demand and prices increase, researcher IBISWorld said.

Americans will spend about $800 million for 25 million real trees and another $2.6 billion on 10 million artificial trees during the holiday season, Nikoleta Panteva, a senior analyst at Los Angeles-based IBISWorld, said in an interview.

"We expect strong tree sales this year and strong holiday sales overall," said Jean Niemi, a spokeswoman for Atlanta- based Home Depot Inc., the world's largest home-improvement retailer and the biggest seller of cut trees. "History shows us that even in a down economy, the Christmas tradition isn't one that families part with."

Spending on trees is up for a third straight year after plunging almost 11 percent in 2008, when the global economy sunk into its worst recession since World War II, according to IBISWorld. Consumer confidence jumped last month by the most since 2003, and the unemployment rate in November was at a 32-month low. The National Retail Federation says U.S. retail sales reached a record during the four-day Thanksgiving weekend, signaling consumers aren't cutting back on holiday purchases.

In 2008, Americans spent $3.14 billion on trees, down from $3.51 billion in 2007, as the recession erased $27.9 trillion in the value of global equities and unemployment in the U.S. was headed to the highest level in almost three decades.

Some retailers are increasing Christmas trees and supplies in anticipation of stronger sales this year. Home Depot expects to at least match last year's tree sales of more than 2 million, Niemi said.

Lowe's Cos., the second-largest home improvement retailer, is offering two additional selections of artificial pre-lit trees this year and expanded its line of garlands and decorations by 5 percent to 10 percent this year, said Colleen Maiura, a spokeswoman for the Mooresville, North Carolina-based retailer.

Total spending for gifts, food and decorations before the Dec. 25 holiday may total $64.3 billion this year, up 3.3 percent from 2010 and the highest since 2007, IBISWorld data show.