SALT LAKE CITY — Utah consumers are feeling better about the state's economic fortunes, according to a new report.
The Zions Bank Utah Consumer Attitude Index climbed 8.6 points to register at 122.5 for the month of March. In comparison, the national Consumer Confidence Index dropped 7.3 points to register at 124.1 during the month.
The increase was a welcome bounce back from a declining trend over the last quarter, one analyst noted.
"This is a healthy increase and a rebound from lower (index) levels the past three months," said Chad Berbert, principal with the Cicero Group, the Salt Lake City-based research firm that compiles monthly survey data used in the report.
The overall index is based on a representative sample of 500 Utah households surveyed with a 95 percent confidence level with a variance of plus or minus 4.38 percent. The results are compared to both Utah data and national data from previous months to identify key statewide consumer sentiment trends.
Berbert said much of the increase was to be found in the rise of consumer attitudes about upcoming economic conditions. The Utah Expectations Index, which measures Utahns’ sentiments about the future of the economy, jumped 10.7 points to register at 114.5 — the largest month-to-month increase in the index in the past twelve months.
"Utahns’ expectations around future business conditions and job availability improved," he said. In addition, the percentage of Utahns who believe their household income will increase by more than the rate of inflation increased by 7 pointsto register at 34 percent of respondents. It was the highest level ever recorded since the index was established in 2011, he said.
"This will likely contribute to what economists call the “wealth effect,” which suggests that consumers will spend more the wealthier they feel," Berbert said. "To add to that, more Utahns anticipate that their retirement investment accounts will increase in value in the next 12 months."
Looking ahead, he said consumers should keep an eye on interest rates and future Federal Reserve Bank decisions that typically drive housing finance activity.
"If interest rates continue to drop, expect to see further housing price growth along the Wasatch Front as buyers are able to finance larger purchase amounts," he said. "This will help homeowners in Utah but may hurt those looking to get into the housing market or those who are renting."
Summer will be an important time to watch what is happening with the national economy, he said.
"There are global signs of slowing and even domestically job growth has slowed somewhat," Berbert said. "While the Utah economy remains quite healthy, trends this summer will indicate whether the national economy is slowing or whether current adjustments are just a blip."Comment on this story
Meanwhile, the Utah Present Situation Index rose 5.6 points to register at 134.4 — the second highest score recorded since its inception. Analysts attributed the increase in large part to improvements in Utahns’ opinions of local business circumstances and employment availability as well as seasonality that frequently produces upbeat economic attitudes with the arrival of springtime.
“Even though we hear people around the country are lowering their expectations for the national economy, Utahns remain very confident in our local economic situation here in Utah,” said Randy Shumway, chairman and partner of Cicero Group. “Utah is seeing strong job growth across most every major industry, one of the highest employment growth rates in the nation, and one of the lowest unemployment rates in the nation. This all contributes to very positive consumer sentiment.”