Consumers in upstate New York grew more willing to spend in April, nearly erasing a drop in consumer confidence that occurred in March.
Upstate residents’ overall consumer confidence rose 3.5 points in April to 71.4, according to a monthly index from the Siena (College) Research Institute (SRI).
The 3.5 point confidence boost essentially cancels out a 4 point fall that took place in March. But upstate New York’s confidence reading remained below the SRI index’s break-even point of 75.
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The break-even level is the point at which an equal number of consumers respond to an SRI consumer-confidence survey with positive answers and negative answers. Index results above 75 would show prevailing optimism, and results below 75 indicate largely pessimistic consumers.
Upstate consumers’ rise in confidence in April stems mostly from improved hopes for the future. The region’s future confidence index swelled 5.6 points to 71.3, while its current confidence index eked out an increase of just 0.3 points to 71.6. SRI combines the current and future confidence measurements to generate its overall confidence index.
The climb in upstate New York consumer confidence came as confidence fell in the rest of the state and nation.
Statewide, overall confidence dipped 1.7 points to 74.6. New York State’s future confidence slipped 0.2 points to 76.9, and its current confidence fell 4 points to 71.
The metropolitan New York City area saw larger decreases, with overall confidence declining by 5.2 points to 76.5. Future confidence eroded by 3.9 points to 80.3, and current confidence in the area skidded 7.2 points to 70.5.
The difference in confidence between upstate New York and the rest of the state is returning to traditional levels, according to Douglas Lonnstrom, professor of statistics and finance at Siena College, which is north of Albany, and SRI founding director.
“Part of it is closing the gap,” he says. “If you look back in March, New York City was about 14 points higher than we were Upstate. Although they generally run higher than we do, they’re normally not that much higher than we are.”
National consumer confidence managed to stay just above the break-even point, according to the University of Michigan’s Consumer Sentiment Index. Overall consumer confidence for the nation inched up 0.2 points to 76.4. Future confidence moved up 2.5 points to 72.3, and current confidence fell 3.1 points to 82.9.
Gas and food prices
Concern about gasoline prices increased throughout the state in April, according to the SRI survey.
In upstate New York, 77 percent of residents said gas prices were a problem. That’s up from 73 percent in March. Statewide, 67 percent of residents indicated gas prices were a problem in April, up from 64 percent the previous month.
Higher gas prices in April likely hurt consumer confidence across New York, Lonnstrom says. He was surprised to see consumer confidence go up in upstate New York in the face of prices at the pump, he added.
“Gas prices have come down in the last week, but that’s not really reflected in these figures,” he says. “If gas prices continue to go down, that would be very good for consumer confidence in the future.”
Food prices were an issue for 69 percent of Upstate residents in April, down from 70 percent in March, SRI found. And both gas and food posed a problem for 62 percent of upstate survey respondents, an increase from 59 percent in March.
Statewide, 67 percent of residents said food prices posed a problem in April, a drop from 69 percent in March. Both gas and food prices were a problem for 54 percent of statewide residents in April, the same as in March.
New York buying plans
Plans to buy cars and trucks jumped 1.4 points in April. For the month, 10.1 percent of consumers said they planned to purchase a car or a truck.
Buying plans for furniture crept up 0.1 point to 18.8 percent, while buying plans for homes rose 0.7 points to 4.1 percent.
“Certainly, it’s a good sign,” Lonnstrom says. “Homes — I think it’s going to take a long time for the housing market to turn around. While [this month’s increase is] not a big number, percentage-wise it’s a big gain. It’s a 20 percent gain in potential buyers.”
However, consumers cut back on plans to buy computers and major home improvements. Computer buying plans slipped 0.8 points to 15.2 percent, and buying plans for major home improvements moved down 0.4 points to 16.5 percent.
SRI made random telephone calls to 805 New York residents over the age of 18 in April to conduct the survey. Margin of error does not apply to consumer-confidence index results, which are derived from statistical calculations, but buying plans have a margin of error of plus or minus 3.5 points, according to the institute.
