Arkansans Optimistic About Future Economic Conditions

Arkansans feel about the same now as they did in June when it comes to their personal financial situation, but more believe the next six months will be a good time to purchase major household items.

That’s according to the second phase of the Fall 2014 Arvest Consumer Sentiment Survey released today. The study includes consumers’ outlooks on personal finances, buying conditions over the next six months and business conditions over the next year and the next five years.

The survey was conducted in October. According to the news release, 54 percent of Arkansas consumers expect their personal financial situation to remain the same over the next 12 months, while 26 percent expect it to improve over that same period.

In June’s inaugural survey, 52 percent expected their situation to remain the same and 28 percent expected it to improve.

The other areas surveyed were Missouri and Oklahoma. Across the region, 51 percent expect their personal financial situation to stay the same, while 29 percent expect it to improve.

When it came to determining buying conditions, 46 percent of Arkansans believe the next six months will be a good time to buy items like furniture, televisions and refrigerators. That’s up from the 42 percent who thought so in June.

By comparison, 50 percent of the entire region believes the next six months will be a good time to buy. That’s an increase of 3 percent.

“The overall increase in the Arkansas Consumer Sentiment Index reflected a mixed bag of its components,” said economist Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas, “Arkansans were a bit more negative about their personal finances, but saw October as a good time to buy things. Near-term economic expectations were more muted, but over the longer term, Arkansans expect some improvement.”

Arkansans felt similarly in October as they did in June in terms of expected business conditions. While 23 percent expected good times for businesses over the next year, 32 percent expected the same over the next five years. That compares to 22 percent (one year) and 33 percent (five years) in June.

Expectations for the region as a whole were slightly higher. While 25 percent of regional respondents expected good times for businesses over the next year, 36 percent expected good times over the next five years. Those percentages are down 4 percent and 1 percent, respectively, from June.

This round of survey results also includes a Current Conditions Index and a Consumer Expectations Index, which follows the model of the national Thomson/Reuters Michigan Surveys of Consumers.

These indexes are meaningful in comparison to national indexes or to previous values of Arvest Consumer Sentiment indexes. Higher numbers indicate some combination of consumer satisfaction with their current and expected personal finances, current and expected economic performance, and the purchasing environment. Larger increases indicate more confidence across the three areas.

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 in October is 76.3, up from June’s 74.7, while the regional index is 82.0.

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 in October is 62.9, up slightly from June’s 62.7, while the regional index is 66.5.

The Arvest Consumer Sentiment Survey is conducted and evaluated by CBER, with the University of Oklahoma’s Public Opinion Learning Laboratory conducting 1,200 phone surveys.

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. Additionally, with future results, consumers, as well as the business community, will be able to see how sentiment is trending.

The Bureau of Economic Research at Missouri State University provides state analysis of the Missouri data. The Steven C. Agee Economic Research & Policy Institute, Meinders School of Business at Oklahoma City University, evaluates the data for Oklahoma.

The survey will be conducted twice a year, with the next survey expected to be completed in May 2015. 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.

Information about the survey and research partners, copies of this release, summary documents and print-ready logos can be found at www.arvestconsumersurvey.com.