The latest Arkansas Consumer Confidence Report still reflects overall pessimism, but does show improvement in several key areas as residents are feeling more comfortable with their personal finances, job security and spending levels.
“The overall mood of Arkansas consumers remains largely pessimistic, particularly in regards to state and national business conditions,” said Talk Business executive editor Roby Brock. “Still, we are seeing some mood swings to more neutral positions versus the negative positions we’ve seen in the past. In short, fewer Arkansans think conditions are getting worse – they just don’t see them getting better either.”
The survey, which was conducted by Talk Business and Hendrix College, received responses from 570 Arkansas voters. It was conducted on Thursday, July 12, 2012 and has a margin of error of +/- 4.1%.
The Arkansas Consumer Confidence Report, which can be downloaded at this link, is sponsored by Delta Trust & Bank and the Electric Cooperatives of Arkansas.
When asked about personal finances, about 12% had an improved outlook from 9 months ago when last surveyed.
Q. How would you describe your personal financial situation? Are you better off financially, worse off, or about the same as you were six months ago?
13% Better 38% Worse 49% About the Same
Last October, 48% said their personal finances were worsening and only 11% felt they were getting better.
The number of Arkansans who had a personal connection to someone who had lost a job, such as a neighbor, friend or relative, also declined from 60% in the last survey to just 52% in the latest poll.
When asked about future personal spending, the percentage planning to spend more or about the same totaled 58%, up from 53% in October 2011. Only 42% said they planned to spend less compared to 47% in the last survey.
But among those spending less, the greatest worry concerned uncertainty about the future.
Q. Why will you be spending less?
41% Plan to conserve money 2% Think items will cost less in 6 months 2% Recently made a major purchase or repair and expect to spend less in the future 46% Worried about the future 9% Other
Inflation, or higher costs of items, was cited as the main reason for greater spending among those who said they would spend more.
ANALYSIS Delta Trust & Bank CEO French Hill, a former U.S. Treasury official and economic advisor to President George H.W. Bush, said the Arkansas Consumer Confidence Report suggests attitudes are moving in a positive direction.
“The statistics show a little bit of improvement. Maybe it’s the ‘new normal,’ which is that we’re in this muddling-along economy and people feel it, but they don’t think their personal situation is going to retreat,” Hill said.
He said a key statistic is found in the answer to the question among those spending less.
“I think uncertainty is still causing people to hold back, make more conservative financial decisions and not be more robust in their spending planning,” Hill said.
From his bank’s perspective, Hill noted that there have been promising advancements in several areas, particularly in housing. Delta Trust has banking operations in central, northwest and southeast Arkansas.
“We’ve seen retail sales up, particularly in auto and retail sales, but an important indicator in the financial services industry is closed mortgage loans,” Hill said. “We are 50% higher at June 30 [this year] over June last year at Delta Trust in closed mortgage loans. About 60% of that activity is new home purchases, while about 40% is refinancing.”
Hill cautioned that while economic indicators can and will improve, it takes longer for consumer confidence to rebound.
“That makes for a long-tailed recovery in people’s emotional feelings,” he said. “Time is what it takes to bring that confidence back.”
You can view French Hill’s interview on the subject from our Sunday night edition of Talk Business in the video below. You can access the full poll results at this link.
POLL METHODOLOGY The Arkansas Consumer Confidence Report survey was conducted by Talk Business Research and Hendrix College on Thursday, July 12, 2012. The poll, which has a margin of error of +/-4.1%, was completed using IVR survey technology among 570 likely Arkansas voters statewide.
All media outlets are welcome to reprint, reproduce, or rebroadcast information from this poll with proper attribution to Talk Business and Hendrix College.