Confidence among Arkansas consumers about the economy and their personal finances continues to increase, according to the latest Arvest Consumer Sentiment Survey completed this spring.
The report compiled by the University of Arkansas Center for Business and Economic Research twice a year. According to the survey conducted in March, 38% of Arkansas consumers expect their personal financial situation to improve over the next 12 months, up from 28% in September.
“The outlook for consumer sentiment is made up of three expectation components: the state of personal finances in one year, the overall economic situation in one year, and overall business conditions in five years,” said Kathy Deck, CBER director at UA and lead economist for the survey. “Arkansas consumers expressed significantly more optimism about each of these.
“This uptick in outlook is consistent with growth in the labor force and declines in unemployment throughout the state. Arkansans reported particular strength in their outlook for their personal finances, which bodes well for retail sales and tax collections in the state,” Deck said.
When it came to determining buying conditions, 55% of Arkansans believe the next six months will be a good time to purchase items like furniture, televisions and refrigerators, up from the 51% in September. Possibly more significant is the sharp decline in the percentage of Arkansans who feel the next six months will be a bad time for major purchases. That number dropped from 30% in September to 15% in the March survey.
Arkansas consumers were slightly more optimistic that respondents in Oklahoma and Missouri which are also part of the regional survey. By comparison, of the larger three-state region, 53% consumers believe the next six months will be a good time to buy.
It’s not a surprise that Oklahoma’s sentiment is below that of Arkansas given the impact Oklahoma has felt with the energy jobs lost. Deck said Oklahoma’s unemployment rate and economic growth is trending slower than that of Arkansas and Missouri is also lagging the growth reported in the Natural State.
Arkansas’ unemployment rate hit an historic low 3.9% in April down from 4.1% in March, the time this survey was completed. Oklahoma’s unemployment in April was 4.5%, up from 4.4% in March. Missouri’s unemployment rate stood at 4.3% in April, also up from 4.2% in March.
Deck said employment is a major factor in sentiment and while Arkansas is making progress on the job front, Arkansans were less optimistic in March than September in terms of expected business conditions over the next year. The survey found 28% expect good times compared with 33% reported in September.
Part of that concern could be related to the upcoming presidential election, now just five months away. Deck said consumers often voice concerns when asked, but in reality that has little to do with their actual spending habits.
The survey found Arkansas respondents were more optimistic for the longer term as 40% are expecting good times over the next five years. Looking at the entire region 24% expected good times for businesses over the next year and 41% expected good times over the next 5 years.