Lower gas prices, better jobs numbers prompt rise in statewide consumer sentiment

An analyst with Siena College believes lower gas prices, an improved stock market, and people feeling “a little more secure in their jobs” were factors in New Yorkers indicating a greater willingness to spend money in the first few months of 2016.

Consumer sentiment in upstate New York was measured at 81.8 in March, up 2.8 points from the last reading in December.

That’s according to the latest survey the Siena (College) Research Institute (SRI) released on Tuesday.

The December index reading of 79 was up 3.7 points from the previous measurement in September.

Upstate’s overall sentiment was 5.3 points below the statewide consumer-sentiment level of 87.1, which rose 1.9 points compared to December, SRI said.

New York state’s consumer-sentiment index is at its highest point since the winter of 2007. The New York City area is leading the way.

“But there’s no question New York City is carrying [the entire state in consumer sentiment]. They’re about 10 points higher than Upstate,” says Doug Lonnstrom, professor of statistics and finance at Siena College and SRI founding director.

Consumer sentiment in New York City measured at 90.7 compared to the upstate overall-sentiment figure of 81.8, SRI said.

But the statewide figure of 87.1 was 3.9 points lower than the March reading of 91.0 for the entire nation, which fell 1.6 points from December, as measured by the University of Michigan’s consumer-sentiment index.

In conducting the quarterly survey, SRI researchers ask respondents if they’re planning to buy certain major items in the next six months.

In this survey, “the buying plans are remaining strong,” says Lonnstrom.

In March, buying plans were up 0.2 points since the December 2015 measurement to 20.1 percent for major home improvements.

“Certainly [home-improvement retailers] Home Depot and Lowe’s look like they’re going to have a good spring,” Lonnstrom quipped.

Buying plans were down 1 point to 15.8 percent for cars and trucks; fell 3.3 points to 39.7 percent for consumer electronics; decreased 2.3 points to 25.4 percent for furniture; and were down 1.4 points to 6.3 percent for homes, SRI said.

“That’s pretty high to say that six percent of the people are going to buy a home in the next six months,” says Lonnstrom.

He also contends that the stock market was a factor in consumer sentiment during the first quarter.

It had a “horrible month” in January, but “bounced back” in both February and March. Consumer sentiment in New York, he noted, seemed to follow the same pattern.

“It dropped generally in January and it’s now bounced back,” says Lonnstrom.

Gas and food prices
In SRI’s quarterly analysis of gas and food prices, 30 percent of upstate New York respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 37 percent in December and 42 percent in September.

In addition, 27 percent of statewide respondents indicated concern about the price of gas, down from 33 percent in December and 35 percent in September.

“One out of four New Yorkers feel gas prices are hurting their budget right now, and that’s the lowest since we ever started … doing this survey,” says Lonnstrom.

SRI has been asking respondents about their concern regarding gas and food prices for nearly eight years, he adds.

When asked about food prices, 59 percent of upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 66 percent in December and 73 percent in September.

At the same time, 60 percent of statewide respondents indicated concern about the price of food, down from 67 percent in December and 69 percent in September.

SRI conducted its survey of consumer sentiment between March 7 and March 30 by telephone calls to 800 New York residents.

It has an overall margin of error of plus or minus 4.2 percentage points, according to SRI.

Contact Reinhardt at ereinhardt@cnybj.com