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Florida’s consumer confidence retains most gains

GAINESVILLE, Fla. – Dec. 1, 2010 – Florida’s consumer confidence dipped only slightly in November to 72 after a large jump in October, portending good news for holiday retailers as higher levels of optimism remained in effect, according to a new University of Florida (UF) survey.

“The confidence reading in November fell only one point from a revised five-point increase the month before,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “This suggests that the big increase in October was not an anomaly, but a return to a higher level of confidence, particularly among Florida’s seniors. While we attributed some of this increase to factors such as the mid-term elections, another interpretation is a delayed return to prevailing levels of optimism among seniors prior to the Gulf oil spill.”

It appears that the effect of the spill on senior citizens lasted about a month longer than it did for those under age 60. The delayed recovery might be explained by the fact that many seniors live along the coast of Florida.

“Looking ahead, it now appears Florida consumers may remain at the current levels of optimism through the rest of the year,” McCarty says.

Three of the index’s five components rose. Perceptions of personal finances now compared with a year ago increased three points to 57, the same level it had reached in April before the Gulf oil spill caused a slump in confidence.

Perceptions of U.S. economic conditions over the next year rose two points to 69, while perceptions of U.S. economic conditions over the next five years rose two points to 79.

The biggest drop showed up in expectations of personal finances a year from now, which fell sharply by seven points to 77. Perceptions of whether it is a good time to buy big-ticket consumer items dropped six points to 78.

However, despite the increase last month, consumer confidence remains at historically low levels, McCarty says. Prior to the past recession, the all-time low for Florida’s consumer confidence was 64. At 72, this month’s index is only eight points above that, although it is better than the reading of 69 a year ago.

Jobs, housing and tourism are all reasons for protracted low levels of confidence, McCarty says. “At the top of the list are persistent high levels of unemployment, which remained unchanged among Floridians last month at 11.9 percent. A large percentage of those were previously employed in sectors such as construction that are forecast to remain weak for many years.”

Also of concern is that housing sales slumped in October, although the median price of a single-family home rose slightly to $136,600 from $133,400 in September, McCarty says.

In terms of retail sales, those retailers that survived this past year will have some relief, at least in the short run, he said. “In the long run, businesses will have to figure out how to become profitable without depending as much on consumer demand. Many businesses have already done so by trimming expenses, largely in the form of labor, and increasing exports.”

The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for November was collected from 441 responses.

© 2010 Florida Realtors®

Published Thursday, December 02, 2010 8:27 AM by Linda Blaine


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