November readings of New York consumers’ willingness to spend moved counterintuitively in the wake of Superstorm Sandy, dropping in the largely unscathed upstate region while rising in the hard-hit New York City area. Upstate New York’s overall index of consumer confidence fell 2 points to 73.6, according to polling conducted by the Siena (College) Research […]
November readings of New York consumers’ willingness to spend moved counterintuitively in the wake of Superstorm Sandy, dropping in the largely unscathed upstate region while rising in the hard-hit New York City area.
Upstate New York’s overall index of consumer confidence fell 2 points to 73.6, according to polling conducted by the Siena (College) Research Institute (SRI). The dip came as metropolitan New York City’s overall consumer-confidence index swelled 2.5 points to 83.1.
“I was stunned by these numbers,” says Douglas Lonnstrom, professor of statistics and finance at Siena College and SRI founding director. “I was prepared to have a very gloomy November report. These numbers came in, and I was absolutely surprised.”
The changes in confidence levels pushed Upstate’s index below its break-even point, which is about 76. That means more of the region’s consumers said they felt pessimistic than optimistic. New York City’s confidence, meanwhile, moved above break-even to reflect more optimism.
A breakdown of overall sentiment into current and future components shows upstate residents souring on the future. The region’s current confidence increased 3.8 points to 77.7, while its future confidence plunged 5.6 points to 71.
In contrast, New York City–area residents raised their willingness to spend in both the present and future. New York City’s current-confidence index climbed 2.6 points to 78.8, while their future confidence ballooned 2.4 points to 85.9.
Election results in November appear to have overshadowed Superstorm Sandy’s effects in the eyes of many consumers, Lonnstrom says. President Barack Obama’s re-election boosted confidence in Democrat-heavy New York City. But it did not play as well in Upstate regions that have more Republican representation.
“The Democrats clearly love the election, and in their mind the election triumphed nature,” Lonnstrom says. “The results of the election make them happier than the aftermath of Sandy made them sad.”
An SRI breakdown along party lines supports that theory. Democrats posted a 1.8-point overall confidence gain to 96. Republicans lost 5.9 points of confidence, driving their index down to 57.8.
Statewide, SRI’s confidence index inched up 0.7 points to 79.4, which is its highest level since the summer of 2007. Current confidence rose 3 points to 78.4. Future confidence ticked down 0.8 points to 80.
Those results were largely in line with a national measurement from the University of Michigan. Its Index of Consumer Sentiment barely changed, adding 0.1 point to 82.7. Its current-confidence component jumped 2.6 points to 90.7, but its future component dipped 1.4 points to 77.6.
Gas and food prices
Declining concerns over gasoline and food prices provided a positive sign for consumers’ willingness to spend, Lonnstrom says. Worries decreased Upstate and in the state as a whole.
Upstate, 66 percent of consumers were concerned about gasoline prices in November, down from 71 percent in October. Food prices stoked worries among 64 percent of upstate residents, down from 77 percent last month. And 52 percent of consumers worried about the price of both gas and food, down from 62 percent.
Statewide, 56 percent of consumers worried about gas prices, a drop from 60 percent last month. Food prices caused unease among 62 percent of residents, down from 70 percent last month. Both gas and food prices concerned 45 percent of New Yorkers, down from 53 percent.
“Food prices dropped 8 percentage points,” Lonnstrom says. “That’s a huge jump down.”
New York buying plans
Buying plans rose across the board in November, SRI found. Cars and trucks posted the biggest increase, 1.7 points. Throughout the state, 14.1 percent of New Yorkers said they planned to buy a car or a truck.
Plans to purchase computers gained 1.6 points to 19.2 percent, while plans to buy furniture rose 3 points to 23.9 percent. Home-buying plans climbed 1.8 points to 4.4 percent, and expected major home improvements picked up 2.5 points to 17.5 percent.
“All the buying plans were up,” Lonnstrom says. “That almost never happens.”
SRI made random telephone calls to 804 New Yorkers over the age of 18 to conduct its November consumer-confidence polling. It develops sentiment indexes from statistical calculations, so they do not have a margin of error. The margin of error for buying plans is plus or minus 3.5 points.
Contact Seltzer at rseltzer@cnybj.com