HIGH POINT, N.C., Sept. 18, 2013 – Confidence in the economy is relatively low and stagnant among North Carolinians, according to the latest HPU Poll’s Consumer Sentiment Index.
The index, based on HPU Poll data, stalled at 70.4 this month. In March, the index fell to 72.0 from 81.9 in fall 2012. The new reading is the lowest since September 2011, when the index was at 59.9.
The latest index is driven by North Carolinians’ consistently negative assessments of their future financial situations and continuing negative predictions about economic conditions in the country as a whole.
The index itself comprises five separate questions that ask respondents about a different aspect of how they view the U.S. economy and their own personal finances. Some findings for individual questions show why the overall index registered a decline, reflecting continuing pessimism among consumers:
September 2013 Index Results:
• Twenty-one percent of North Carolinians, compared to 22 percent in March, expressed concern that they would be worse off financially a year from now. In Sept. 2012, only 9 percent thought they would be worse off.
• Thirty-nine percent of North Carolina residents said they expected bad times for business conditions in the country as a whole—compared to 37 percent of respondents in March.
• Most notably, those who expected good business conditions in the next 12 months dropped to 23 percent this month from 32 percent in March.
• Even where there appear to be possible positive movements, there are potential downsides. For example, 54 percent of North Carolinians say it is more likely that there will be widespread unemployment or depression in the economy rather than continuous good times over the next five years or so. That is down from 57 percent in March. But the percentage of people who expect continuous good times is also down to 22 percent this month from 29 percent in March, showing that respondents are uncertain about the economy’s future.
“If North Carolina is undergoing an economic recovery, residents of our state do not appear to be feeling it,” says Dr. Sadie Leder Elder, associate director of the HPU Poll. “These new numbers may signal an even gloomier turn in public feeling than we saw in March. This poll in general has found people anxious about the economy, worried about international affairs, and unhappy with the performance of government officials. We are still waiting to see signs of a turn around.”
Dr. Jerry Fox, associate professor of economics at HPU, said there are several factors that could be causing North Carolinians to feel down about the economy.
“One factor that is likely contributing the decline in consumer sentiment is concern about interest rates,” says Fox. ”Mortgage rates have risen in recent months, which could adversely impact the housing market. In general, higher interest rates cause the cost of consumer debt to rise. This causes household financial expectations to worsen.”
The index models its questions on the national Thomson Reuters/University of Michigan Surveys of Consumers (http://www.sca.isr.umich.edu/). The HPU Poll plans to field the questions at least once per semester in order to gauge consumer feelings on economic conditions.
The HPU Consumer Sentiment Index is based on five questions used for the Thomson Reuters/University of Michigan Surveys of Consumers (http://www.sca.isr.umich.edu/). The High Point University Phillips School of Business and directors of the HPU Poll consulted with the directors of the Surveys of Consumers and other state survey organizations that calculate similar state-wide indexes before it first asked the questions in 2010.
The most recent survey was fielded by live interviewers at the High Point University Survey Research Center calling on Sept. 8 – 12. The responses from a sample of all North Carolina counties came from 408 adults with landline or cellular telephones. The Survey Research Center contracted with Survey Sampling International to acquire this sample. The survey has an estimated margin of sampling error of approximately 5 percentage points for these North Carolina residents. The data are weighted when appropriate toward population estimates for cellular and landline telephone use, age, gender and race. In addition to sampling error, factors such as question wording and other methodological choices in conducting survey research can introduce additional error into the findings of opinion polls. For more information about this poll, please see the memo at: http://acme.highpoint.edu/~mkifer/src/24memox.pdf
Further results and methodological details from the most recent survey and past studies can be found at the Survey Research Center website at http://src.highpoint.edu/
Dr. Martin Kifer, assistant professor of political science, serves as the director of the HPU Poll, and Dr. Sadie Leder Elder, assistant professor of psychology, serves as the associate director of the HPU Poll.