Florida’s consumer confidence rises in continued up-and-down pattern
March 31, 2009
GAINESVILLE, Fla. — Consumer confidence among Floridians rose three points to 65 in March amid some good economic news, but the pattern is one of fluctuation rather than real economic recovery, says a researcher.
“Florida consumers remain relatively pessimistic despite the three-point rise in confidence,” said , director of at the . “Until there is a clear message that things are changing for the better, we expect consumer confidence to continue to move up and down as conflicting economic news trickles in.”
Three of the five components of the index rose, while one declined and one remained unchanged. Perceptions of U.S. economic conditions over the next five years rose 12 points to 79, while perceptions of U.S. economic conditions over the next year rose 10 points to 59. Perceptions of personal finances now compared with a year ago rose one point to 42, while perceptions of personal finances a year from now remained unchanged at 79. Perceptions of whether it is a good time to buy big-ticket items fell eight points to 64.
Since July 2008, consumer confidence has vacillated within an eight-point range, McCarty said.
“Much like the stock market, consumer confidence seems to lack a clear direction as positive economic news is typically countered by negative news,” he said. “For example, housing sales and prices in some areas of Florida have increased, but unemployment is at levels not seen for 30 years. The stimulus package passed, but unpopular bonuses at AIG and debate in the Florida Legislature about accepting parts of the stimulus package counter that positive effect.”
The employment situation in Florida is expected to worsen at least through the end of 2009 and possibly into 2010, McCarty said.
“Like the rest of the country, Florida consumers have pulled back dramatically on spending in the face of declining home prices and uncertainty about job security,” he said. “On the positive side, housing price declines in some areas of Florida seem to have slowed, and new federal tax rebates for first-time buyers along with low interest rates may make for a much better home buying season given pent-up demand.”
McCarty said he believes these events will eventually improve circumstances for some businesses in Florida, although the construction industry may take a long time to recover.
“Increased home sales and a clear change in the stock market would both send messages to Floridians that the economic recovery is on its way,” he said. “Until then, consumers are likely to remain pessimistic and cautious about spending.”
The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for March was conducted from 470 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.