Arkansas Consumers Feeling ‘Leery’ About Economy, Survey Says

Arkansans are feeling less optimistic and a bit cautious about their economic fortunes compared to their neighbors in Oklahoma and Missouri and other guarded consumers across the nation, according to the first-ever Arvest Consumer Sentiment Survey released today.

The newly unveiled three-state consumer survey, styled after the national consumer sentiment index conducted by Thomson Reuters and the University of Michigan, was compiled by the Center for Business and Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas.

The University of Oklahoma’s Public Opinion Learning Laboratory conducted the 1,200 phone surveys in May and June. The survey, sponsored by Bentonville-based Arvest Bank, was based on five questions that evaluate consumer perceptions about their current and future finances, current and future business conditions, plans to purchase major household items, current level of consumer debt, current and planned savings and demographic information.

Kathy Deck, CBER director and lead economist for the survey, offered a mixed assessment on how confident Arkansas consumers were feeling about the economy, compared to neighbors to the west and north.

“Our initial readings indicate that consumers in the region, and especially in Arkansas, are quite leery about overall economic conditions in the near future, although they reported being relatively upbeat about their current financial status,” Deck said. “The consumer sentiment numbers seem consistent with the contradictory nature of other economic data for the state, particularly the declining labor force in the face of improving payroll employment.”

Overall, the consumer sentiment index for Arkansas was 67.4, trailing that of Missouri (68.6) and Oklahoma (76.4). All three states trailed the national consumer sentiment index for June that rose to 82.5 from 81.9 in May, according to Thomson Reuters and the University of Michigan.

The national survey found the highest share of households reporting improved financial gains in nearly seven years. Still, most consumers in Arkansas and across the U.S. are cautious because many believe that their income will not keep up with inflation — meaning that most Americans believe their living standards will decline short-term.

Deck said the new economic data indicates that Arkansas can expect continued on-again, off-again growth. “Until consumers indicate that they feel confident about their economic futures, personal income growth will be the key to additional spending and a breakout recovery,” said the University of Arkansas economist. “We will look forward to our next data point to begin telling us about trends in optimism.”

Going forward, the statewide and regional consumer confidence index 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 additional information regarding specifics of consumer activities and plans.

John Womack, chairman and CEO of Arvest Bank of Central Arkansas, said the survey will be beneficial for local communities and customers by giving them an accurate view of consumer sentiment.

“These first results give us better, more localized, information in that regard than has been available in the past,” Womack said. “What is most important is simply knowing where people in the state stand in their views – especially since consumers drive the majority of economic activity.”