Arkansans are a conservative lot but still optimistic overall about personal finances for the next year, according to the Fall 2015 Arvest Consumer Sentiment Survey released Tuesday. However, the optimism is down from earlier this year.
The report which looks at personal finance, buying conditions and business outlook over the next 12 months showed Arkansas respondents’ optimism dipped a bit from the March survey.
Arvest reports the September survey found 56% of Arkansas consumers expect their personal finances to remain the same over the next 12 months, while 28% expect improvement over that same period. In March’s survey, 55% expected their financial situation to remain the same and 30% expected improvement.
“Over the next year in Arkansas, there are expectations of an improving national economy, while consumers were less optimistic about their own prospects than they were in March,” said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, and lead economist for the survey.
Deck said the mixed outlook is likely the result of the ongoing lack of an increase in personal wages.
“In other words, while consumers are generally positive, the ongoing lack of increases in their wages seems to be dampening their positive outlook,” she said.
While income growth has lagged the overall economic expansion in the region, consumers continue to beef up disposable income because of lower gas prices which are well below the levels of last year. The average price for a gallon of gasoline this week across Arkansas is $1.80, which is nearly 90 cents cheaper than the same week a year ago. This is an estimated monthly savings of $50 to $100 for a two-car family.
When it came to determining buying conditions, 51% of Arkansans believe the next six months will be a good time to buy items like furniture, televisions and refrigerators. That’s down from the 56%t who thought so in March. By comparison, 55% of the entire region which includes Missouri and Oklahoma believes the next six months will be a good time to buy – indicating that Arkansas sentiment is down 4% in the category. Across the 3-state region, 54% of respondents expect their financial situation to stay the same, while 33% expect it to improve.
In Missouri and Oklahoma, 26% of consumers were more optimistic about their personal finances than the 20% reading among Arkansas consumers.
The recent survey found expected business conditions among Arkansas respondents were slightly more optimistic than in March. One in three Arkansas respondents expected good times for business over the next year, compared to 29% in the March survey reading. When the timeframe was expanded to five years, 39% said they expect continuous good times over the next five years which was the same in September as in March.
Expectations for the 3-state region as a whole were mixed. While 32% of regional respondents expected good times for businesses over the next year, 43% expected good times over the next five years. That compares to 34% (one year) and 42% (five years) in March.
Arkansas, and Northwest Arkansas in particular have experienced economic recovery with lower unemployment, population growth and overall steady economic output this year. Jonesboro and Central Arkansas too, have seen job growth and ongoing investment in their regions. Fort Smith has seen modest growth in investments and better economic output as well.
According to the second quarter The Compass Report, two of Arkansas’ largest metro areas continued to see economic improvements during the second quarter of 2015, with the Fort Smith metro economy falling back slightly because of poor job growth and a decline in building activity. The second quarter follows a first quarter in which all three metro areas posted year-over-year gains. The Compass Report is managed by Talk Business & Politics and sponsored by Arvest.
Compared to the second quarter of 2014, economic conditions were stable and growing in Central Arkansas and Northwest Arkansas, respectively, and down in the Fort Smith metro. The second quarter dip in the Fort Smith area follows a first quarter in which it posted its best results since the first quarter of 2009, according to The Compass Report.