According to industry research firm IBISWorld, Halloween spending is expected to grow 10.7 percent from 2011 to reach a record-setting $8 billion, as more consumers participate in festivities and purchase small-ticket items like home decorations and candy.

Additionally, larger budgets will allow consumers to spend more on store-bought, ready-made costumes, rather than do-it-yourself (DIY) alternatives that were popular during the recession.

“Rising consumer sentiment and disposable incomes have allowed total spending on Halloween to increase every year since its low of $5 billion in 2009, which was a massive 18.5 percent decline from 2008,” said Olivia Tang, analyst for Santa Monica, Calif.-based IBISWorld. “Halloween spending fully recovered in 2011 when it surpassed its 2008 peak of $6.1 billion. This year, as Americans continue to relieve their pent-up demand that lingered from the recession, IBISWorld expects almost every category to benefit.”

Costumes

Costumes make up the largest proportion of Halloween spending at 35.8 percent, representing a 12.2 percent increase to $2.9 billion in 2012.

Candy

The price of sugar, candy’s main input, has surged at an estimated 11.6 percent per year on average during the five years to 2012. Although this factor drives up the price of chocolate and other candies, sales will remain strong, accounting for about 29.3 percent ($2.4 billion) of Halloween sales.

Decorations

Revenue for the decorations segment is anticipated to grow the fastest, jumping 23.7 percent in 2012 to total $2.4 billion. Social media sites like Pinterest, which prompt users to develop and share decoration ideas and instructions, have largely driven this trend. Creative inspiration and higher consumer sentiment will drive consumers to buy more high-priced decorations.

Cards

Consumers are anticipated to spend less on greeting cards this Halloween, causing this segment’s revenue to fall 7.7 percent to an estimated $440 million in 2012. As consumers allocate more of their funds to costumes, candy and decorations, people will spend less on Halloween greeting cards.

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