UF survey: consumer confidence remains unchanged in April

May 29, 2001

GAINESVILLE, Fla. — Consumer confidence in Florida remained unchanged from April, continuing to be plagued by concerns about personal finances, University of Florida economists said Tuesday.

The preliminary index for May remained steady at 91, said Chris McCarty, survey director for UF’s Bureau of Economic and Business Research.

“Perceptions of personal finances are now as low as they have been since December 1996,” McCarty said. “With a hot summer ahead and energy problems looming, it is unlikely that consumer confidence will rise significantly any time soon.”

And while a confidence level of 91 is still not terribly low, he said, there is a “strong possibility that confidence will get worse before it gets better.”

The component measuring perceptions of current finances fell five points, from 91 in April to 86 in May. There was also a five-point fall in perceptions of U.S. business conditions over the next five years.

On the positive side, though, the component measuring whether it is a good time to buy big-ticket consumer items, such as cars, appliances and furniture, rose four points, he said.

“Floridians seem to recognize that low inflation coupled with low interest rates means that now is a good time to buy more expensive consumer items which are often bought on credit,” McCarty said. “But consumers are also feeling the effects of the economic downturn in their pockets.”

In April, 45 percent of those asked said they were better off than at the same time last year. Only 40 percent said they were better off in May.

While spending on durable goods was down, the rise in optimism about whether it is a good time to buy consumer durables should, in the short-term, result in an increase in spending on these items, he said.

The bureau conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for May was calculated from 438 responses. Numbers for prior months are based on about 1,000 responses. The margin of error for the index is 3 percent.

Consumer confidence is designed to help predict buying patterns by measuring consumers’ mood toward buying. Although other economic indicators also are predictors of buying patterns, consumer confidence tends to be available sooner than those indicators.