Most Arkansans Feel Good about Their Personal Finances
A majority of Arkansas consumers expects their personal financial situations to improve or remain the same within the next year. Their level of optimism is higher than overall regional expectations. At the same time, they are less optimistic about future business conditions than the overall region. These observations are found in results from the second phase of the Arvest Consumer Sentiment Survey released today.
In addition to the overall Consumer Sentiment Index released in July, the Arvest Consumer Sentiment Survey also includes a Current Conditions Index and a Consumer Expectations Index, continuing to follow the model of the national Survey of Consumers produced by the University of Michigan.
In Arkansas, 52 percent of consumers expect their personal financial situation to remain the same over the next 12 months, while 28 percent expect it to be better over the same period. Only 20 percent expect their personal financial situation to be worse than it is currently. By comparison, 27 percent of consumers in the three-state region of Arkansas, Oklahoma and Missouri expect their personal financial situation to improve and 51 percent expect it to be the same. In Missouri, only 19 percent of consumers expect their situation to improve and 53 percent expect it to remain the same.
However, when looking at expectations of business conditions, Arkansans were less optimistic than their neighboring states. Only 22 percent of Arkansas consumers expect business conditions to be favorable in the next year, compared with 30 percent of consumers in Missouri and 32 percent in Oklahoma. This trend continued when looking at expectations over the next five years, with 33 percent of Arkansas consumers expecting positive business conditions compared with 36 percent in Missouri and 41 percent in Oklahoma. This long-term pessimism is also reflected in Arkansas consumers’ expectations of widespread unemployment over the next five years, with 61 percent of Arkansans expecting widespread unemployment compared with 57 percent in Missouri and 53 percent in Oklahoma.
The Arvest Consumer Sentiment Survey is conducted by the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas in Fayetteville. The University of Oklahoma’s Public Opinion Learning Laboratory conducted the 1,200 phone surveys.
In discussing the results, Kathy Deck, CBER director and lead economist for the survey, said, “Our first consumer sentiment survey results show us that Arkansans are generally positive about their own future financial prospects, but have deep worries about the trajectory of the overall economy. As an economist, I have one eye on the improving employment situation in the state and one eye on the declining labor force to help explain why consumers feel the way they do. For those who are employed in Arkansas, conditions are clearly improving, but there is reasonable nervousness about the people who have had to retire early or who are not getting on the career track that they anticipated.”
The Current Conditions Index is tabulated from the answers to two questions on the survey: “How is your current financial situation compared with a year ago?” and “What do you think of buying conditions over the next six months?” The Current Conditions Index for Arkansas is 74.7, slightly below that of Missouri (77.6) and Oklahoma (82.2). The regional Current Conditions Index is 78.7.
The Consumer Expectations Index is tabulated from the answers to three survey questions: “How do you expect your financial situation to change in the next year?” “How do you think business conditions will be in a year?” and “How do you expect business conditions will be in five years?” Arkansas’ Consumer Expectations Index (62.7) is lower than that of Missouri (62.9) and Oklahoma (72.6). The regional Consumer Expectations Index is 66.7.
Arvest Bank’s sponsorship of this survey is due to its desire to provide beneficial data for its customers and communities. The data provides a reading of how consumers are feeling about the economy in the states where the bank operates. These first results give better, more localized, information than has been available in the past. Because consumers drive the majority of economic activity, it is important to simply know where people in the state stand in their views. Additionally, with future results, consumers, as well as the business community, will be able to see if sentiment is trending up or down with sentiment nationally.
The Arvest Consumer Sentiment Survey will be conducted twice a year, with the next survey expected to be completed in late November. With each study, the index score will be released first, followed by a second release on consumer outlook including the Current Conditions Index and the Consumer Expectations Index and a third release on savings and spending expectations.
for more information about the survey, research partners, and summary documents.