Reports show gains in consumer confidence, spending

info for this story submitted by the University of Arkansas at Fort Smith

Area consumers expect to spend more this holiday season than last year, according to preliminary data reported Dec. 16 by the Center for Business Research and Economic Development (CBRED) at the University of Arkansas at Fort Smith.

The results confirm third quarter survey results conducted in early September, which indicated that consumers intended to spend more this holiday season than in 2009.

The results also support findings of The Consumer Compass Report for the third quarter of 2010. People in the Fort Smith region were more positive about their personal financial condition and the future of the regional economy, according to results of The Consumer Compass survey released Dec. 1.

In the inaugural survey conducted Aug. 31, 11.5% and 41% of respondents said their financial condition was better off and worse, respectively, than a year ago. The numbers moved in a more optimistic direction in the survey conducted Nov. 29, with 12.5% and 40% of respondents saying their financial condition was better off and worse, respectively, than a year ago.

According to the UAFS report, 61% of respondents said they intended to spend more than last year, while 39% indicated they expected to spend about the same. The results confirm the September findings reported for the third quarter in the Fort Smith Regional Economic Outlook Report, a quarterly report sponsored by Arvest Bank.

“We wanted to retest third quarter results as we moved through the crucial holiday retail season to determine if the earlier consumer sentiment was still there,” stated center director Dr. Kermit Kuehn. “These early results indicate that we can expect relatively stronger retail sales to close out 2010.”

Craig Rivaldo, Arvest Bank president, stated, “This is great news for our regional economy as consumer spending is critical to a healthy recovery.”

Kuehn emphasized that the results were preliminary, but indicated that the strength and consistency of the results with earlier findings, as well as the value of the information to area decision makers, made the early release desirable.
 
“If I thought the basic trend would change significantly between now and the final results, I would hesitate to release them,” he said.

The report also outlined early results for consumer intentions related to savings and the use of credit over the next 12 months. Sixty-three percent of respondents indicated they intend to use less credit for purchases over the next 12 months. Forty-nine percent of respondents indicated they expected to save less over the next 12 months than they are now, versus eight percent who expected to save more.