Arkansans Remain Cautious in Economic Sentiment

Arkansans’ opinion regarding the economy has declined slightly since March despite improved economic indicators in the state, according to the Fall 2015 Arvest Consumer Sentiment Survey released Tuesday.

The current consumer sentiment index for Arkansas is 77.8, down from 79.1 in March, but the current number remains significantly higher than previous surveys in October 2014 (68.1) and June 2014 (67.4).

The Arkansas index is also more closely aligned with the national index (87.2), as reported by Thomson Reuters and the University of Michigan, than in previous surveys. The 9.4-point difference between the Arkansas and national indexes is half of what is was in October 2014.

“The modest decline in Arkansas consumer sentiment is somewhat at odds with the state’s improving economic situation,” said Kathy Deck, director of the Center for Business and Economic Research, Sam M. Walton School of Business at the University of Arkansas at Fayetteville and the lead economist for the survey. “Arkansans remain far more negative in their perceptions of economic conditions than their regional and national counterparts.

“Moreover, the decline in sentiment since the March reading was broad-based, occurring for both families with incomes above and below $75,000. In short, good local macroeconomic news does not seem to be positively affecting individual perceptions about their own situations.”

The largest decline came from Arkansas respondents who are unemployed. The September reading of 70.5 was more than 20 points below March’s 90.8.

The two most notable increases, meanwhile, came among 18- to 24-year-olds – from 113.0 in March to 121.0 in September – and among Arkansans who are 65 or older – from 65.0 to 67.5.

“While the index in Arkansas is down a little bit from earlier this year, it is still up more than 10 points from this time a year ago. That is what we are seeing in our customers’ behaviors — signs of improved sentiment,” said John Womack, president of Arvest Bank in Little Rock. “We’ve seen an increase in mortgage loans used to purchase homes, we’re seeing increased activity in new credit card accounts and we’ve had a good year for consumer loans. Overall I would say that while this report shows a slight decline in consumer confidence from March, it’s still a vast improvement from the confidence we saw last year.”

The current regional index for Arkansas, Oklahoma and Missouri – including Greater Kansas City – is 82.6, down from March’s index of 83.2. That drop is less dramatic than the national index, which fell from 93.0 in March to 87.2 in September.

Of the three states included in the Arvest Consumer Sentiment Survey, only Arkansas reported a decline in overall consumer sentiment. Missouri and Oklahoma both reported slight increases, from 85.2 to 85.8 in Missouri and from 84.8 to 85.0 in Oklahoma.

The Arvest Consumer Sentiment Survey is conducted 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 random phone surveys. The CBER, Missouri State University and Oklahoma City University provided state data analysis.

The survey is conducted twice a year, with the next survey expected to conclude in March 2016. With each study, the index score will be released first, followed by additional information regarding specifics of consumer outlook for the near future and plans for savings and spending.

Information about the survey and other summary documents can be found at www.arvestconsumersurvey.com.