Utah consumer confidence still strong, despite price hikes
Laura Seitz, Deseret News
SALT LAKE CITY — Utah consumers continue to express optimism in the local economy, even though the buying power of their money recently has begun to decline.
The Zions Bank Consumer Attitude Index increased 2.4 points to 99.2 from February to March. Consumer attitudes have improved markedly over the past year, with the index jumping 20 points year-over-year compared with this month’s national Consumer Confidence Index, which climbed 4 points to 82.3.
Growing confidence in local business conditions led to this month’s increase, said Zions Bank economic adviser Randy Shumway.
“Forty-one percent of Utahns think business conditions are good, compared to only 8 percent who think conditions are bad, and 51 percent who believe conditions are normal,” Shumway said. “The percentage of Utahns who believe current business conditions are good has increased 12 points over the last 12 months.”
Utahns are largely much more optimistic than the rest of the nation, he added.
The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — climbed 5.8 points to 99.3 over the past month and now sits almost 19 points higher than the national Present Situation Index.
Dampened consumer expectations for both general business conditions and the labor market prevented the consumer attitude index from moving even higher, the report stated.
The survey showed that 28 percent of Utahns think business conditions will improve six months from now, down 3 percentage points from the previous month.
Additionally, only 27 percent of Utahns believe the number of available jobs in their area will be higher six months from now, down from 29 percent from last month and 34 percent in January, according to the report.
“Declining expectations about the trajectory of the economy are not necessarily a negative indicator, as they may simply mean that more Utahns believe the economy has peaked and that it will not further expand or improve,” Shumway said.
Meanwhile, the Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — rose marginally, up 0.1 points to 99.1 — 15.6 points higher than its national counterpart.
Shumway said Utahns are becoming more concerned about rising prices and the subsequent impact they could have on their income. The survey showed that 80 percent of respondents think prices for consumer goods in general will increase over the next year, up from 73 percent in February.
Consumers are also becoming more confident that gasoline prices will increase over the next year. Conversely, consumers are less confident that their household income will increase at a rate higher than inflation.
The reported stated that 51 percent of Utahns believe it is unlikely their household income will increase more than the rate of inflation during the next two years, up from 46 percent in February and 42 percent in January.
The consumer attitude index is based on a representative sample of 500 Utah households surveyed monthly by The Cicero Group, with a confidence level of plus or minus 4.38 percent.