After losing some confidence amid the federal-government shutdown in October, upstate New York and New York state consumers in November became a little more positive and willing to spend money.
Consumer sentiment in Upstate rose 2.2 points to 67.4 in November, according to the latest monthly survey the Siena (College) Research Institute (SRI) released Dec. 4.
Upstate’s overall-sentiment index of 67.4 is a combination of the current-sentiment and future-sentiment components. The region’s current-sentiment index of 74.3 was up 1.2 points from October, while the future-sentiment level increased 2.9 points to 63, according to the SRI data.
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The Upstate figure was 5.9 points below the statewide consumer-sentiment level of 73.3, which rose 3.7 points from October’s level, SRI said.
New York’s consumer-sentiment index was 1.8 points lower than the November figure for the entire nation of 75.1, which was up 1.9 points from October, as measured by the University of Michigan’s consumer-sentiment index.
New York state consumers have “recovered” following an October that started with the federal-government shutdown and the fear that the U.S. was going to default on its bills, says Douglas Lonnstrom, professor of statistics and finance at Siena College and SRI founding director.
“So [New York] lost six points in confidence in October but we gained four of them back in November,” Lonnstrom says.
Even though New York’s consumer sentiment trails the nation’s sentiment level by two points, the difference in the current-confidence component suggests the state’s consumers are “much more gloomy” at the present time than the rest of the country, he suggests.
At 74.3, New York’s current consumer sentiment is about 14 points below the nation’s level in the same measure, Lonnstrom says. At the same time, New York’s future-sentiment level of 72.7 is about six points higher than the nation’s future-sentiment level, he adds.
“We’re a little bit more optimistic about the future than the rest of the nation at this stage,” he says.
When compared with the previous three years, the state’s overall-confidence sentiment of 73.3 is down 6.1 points from November 2012, up 11.1 points from November 2011, and has increased 6.2 points compared to November 2010, according to the SRI data. The sentiment index measured 55.6 in November 2008.
Besides determining consumer sentiment, SRI’s monthly survey also examines respondents’ plans for buying big-ticket items in the next six months.
In November, buying plans were down 2.6 points to 19.3 percent for furniture; dipped 1.1 points to 4 percent for homes; and fell 3.4 points 13 percent for major home improvements.
Buying plans rose 1.1 points to 14 percent for cars and trucks, and increased 2.8 points to 38.3 percent for consumer electronics.
Nearly four in 10 respondents have plans to buy some kind of electronic gadget, whether it’s a television, a smartphone, an iPad, or a tablet, he says.
“About 40 percent of the people are looking to buy some of those for Christmas, so I think the electronics business might do pretty well at Christmas,” Lonnstrom contends.
In addition to consumer spending, the SRI survey also asks respondents if they think business conditions in New York will improve in the next year.
On that question, respondents were nearly evenly divided, which is an improvement over last month, according to Lonnstrom. In October, 45 percent of those surveyed expected a bad year in 2014, while 31 percent had a more positive view.
When asked to consider what conditions might be like five years from now, the responses are also “slightly more optimistic,” he says.
The survey found 29 percent of respondents in November forecasting improved conditions, up from 26 percent in October.
“A little bit of a positive movement as we look to the future, both [in] business for next year and business [in the next] five years,” Lonnstrom says.
Gas and food prices
In SRI’s monthly analysis of gas and food prices, 60 percent of upstate respondents said the price of gas was having a serious impact on their monthly budgets, which is up narrowly from 59 percent in October.
In addition, 50 percent of statewide respondents indicated concern about the price of gas, down slightly from 51 percent in October, according to SRI.
In August and September, the SRI data indicated nearly six in 10 state respondents were concerned about the price of gas, which has now dropped to five out of 10.
“That’s a pretty significant drop in a short period of time,” Lonnstrom says.
He points to lower gas prices that have stabilized “a little bit,” and no predictions of a return to $4 per gallon as factors in the decreased concern among New York respondents.
When asked about food prices, 67 percent of Upstate respondents indicated the price of groceries was having a serious impact on their finances, unchanged from October. About 66 percent of statewide respondents expressed concern about their food bills, up from 65 percent in October.
SRI conducted its survey of consumer sentiment in November by random telephone calls to 622 New York residents over the age of 18.
As consumer sentiment is expressed as an index number developed after statistical calculations to a series of questions, “margin of error” does not apply, SRI said. Buying plans, which are shown as a percentage based on answers to specific questions, have a margin of error of plus or minus 3.9 points.
Contact Reinhardt at ereinhardt@cnybj.com