Job Worries Dampen Consumer Optimism in Greater Washington Region

Jun 15, 2010, 08:30 ET from Greater Washington Board of Trade

Board of Trade Consumer Confidence Index Shows Little Change

WASHINGTON, June 15 /PRNewswire-USNewswire/ -- Consumer confidence has remained virtually unchanged over the past six months, according to the Greater Washington Board of Trade's Mid-Year Consumer Confidence Survey.  Since the last survey in November 2009, the Consumer Confidence Index rose only two points.  The survey's margin of error is +/-2.83.

Survey results show that concern about the employment market is holding back overall consumer confidence in the region, with 61 percent of the respondents saying that jobs in the Greater Washington, DC region are "scarce" and hard to find.  When asked about the future, half the respondents predict that the job market will either stay the same or even get worse over the next six months.

"Consumer confidence in our region has barely moved since last November indicating that there is growing trepidation in the economy," said Jim Dinegar, president and CEO of the Greater Washington Board of Trade.  "There have been too many disruptions to the recovery to give people confidence through the recession, but confidence will return."

The Greater Washington Board of Trade's Consumer Confidence Index, based on a biannual survey of 1,200 adult consumers in the region and conducted by the Clarus Research Group, had been steadily growing stronger since late 2008.  The most recent survey, however, found "little change over the last six months," said Ron Faucheux, president of Clarus.  "Most components of the region's Mid-year Consumer Confidence Survey are virtually the same as they were in November 2009."  The survey was conducted in Washington, DC; Northern Virginia; and Suburban Maryland.

"Confidence in the regional economy has leveled off because consumers are experiencing a jobless recovery," said Peter A.S. Pfeiffer, managing partner of Tatum's Mid-Atlantic practice, which sponsors the Greater Washington Board of Trade's surveys.  "Most consumers say that current employment conditions are more negative than positive."

When consumers were asked their overall assessment of current economic conditions in the Greater Washington region, 51 percent see them as positive, which is much higher than national surveys of the entire U.S. economy.  The May Conference Board's national consumer survey, for example, found that only 10 percent of consumers nationwide held a positive view of economic conditions.

"Consumer confidence in the region continues to be much better than the rest of the country," Dinegar said.  "The numbers show a very big difference that works in our favor."

Many economists believe consumer confidence is one of the most important leading economic predictors.  When consumers are reluctant to spend, the economy is negatively affected and when they open their wallets, the economy moves.

Key Findings:

  • CONFIDENCE:  The overall Consumer Confidence Index in the Greater Washington region increased two points since November 2009, rising from 60 to 62 points.  Since December 2008, the region's Consumer Confidence Index has increased by 13 points, from 49 to 62.  
  • JOBS:  Perceptions of the job market remain a major drag on consumer sentiment, improving by only one point over the past six months.  Positive sentiment on employment conditions has gone from 11 percent to 12 percent since November 2009, while negative sentiment dropped four points.
  • MAJOR PURCHASES: The percentage of consumers saying it is a good time to make major purchases has remained the same as it was in November 2009, at 43 percent.
  • HOUSING MARKET:  Data indicates that homeowners in the Greater Washington region are a little less optimistic about home values rising over the next six months, dropping from 33 percent to 30 percent.  The same percentage of homeowners in both the November 2009 and June 2010 surveys expect to sell their homes (four percent).  On a more positive side for some regional businesses, there was a small increase (three points) in the number of homeowners who expect to spend more than $5,000 repairing, renovating or decorating their homes in the next six months.  Also, the number of renters in the region who say they will buy a home within the next six months increased slightly from eight percent to ten percent.
  • RACE:  Caucasians have a little less confidence in the regional economy than do African Americans (by six points) and Hispanics (by one point). Economic optimism among African Americans and Hispanics is driven largely by expectations for the future, not by perceptions of current conditions.  There is more positive sentiment about current economic conditions among Caucasians (55 percent) than among African Americans (50 percent) or Hispanics (43 percent).
  • AGE, INCOME, EMPLOYMENT:  As consumers get older, their confidence in the economy slips.  As income levels increase, so do confidence levels.  The self-employed have the most confidence in the region's economy, and that is followed by people who are employed either full- or part-time.  Confidence is brought down by those who are retired and not working.

In contrast to the Greater Washington Board of Trade's Consumer Confidence Survey, the Business Outlook Survey, which is based on a survey of the region's business executives, jumped a hefty 18 points, from 68 to 83, between December 2009 and April 2010.  "It's a good sign that overall confidence keeps rising," said Faucheux, "but it is disappointing that improvement in consumer confidence hasn't kept pace with higher levels of confidence recently expressed by local business executives."

The Greater Washington Board of Trade's biannual Consumer Confidence Survey indicates the degree of optimism on the state of the local economy.  Consumers express their optimism through their perceptions about the economy and personal spending.  

For complete results, visit:  

http://www.bot.org/media-center/publications.aspx#consumerconfidence


SURVEY QUESTIONS AND TOPLINE RESULTS:

1. Thinking about the local economy, would you say current business and economic conditions in the Greater Washington D.C. area are mostly GOOD - OR - would you say they're mostly BAD?



51%

Mostly good

31

Mostly bad

14

(VOLUNTEERED) Neither good nor bad

4

(VOLUNTEERED) Don't know/Not sure



2. Thinking ahead six months, do you think business and economic conditions in the Greater Washington D.C. area will improve, will get worse OR will stay the same?



46%

Will improve

9

Will get worse

41

Will stay the same

4

(VOLUNTEERED) Don't know/Not sure



3. Let me now ask you about the ability of local people to find jobs in the Greater Washington D.C. area… thinking about current employment conditions in the local market, would you say jobs are plentiful and easy to find OR would you say jobs are scarce and hard to find?



12%

Plentiful, easy to find

61

Scarce, hard to find

19

(VOLUNTEERED) Neither/somewhere in the middle

8

(VOLUNTEERED) Don't know/Not sure



4. Thinking ahead six months, do you think job opportunities in the local employment market will improve, will get worse OR will stay the same?



46%

Will improve

10

Will get worse

40

Will stay the same

5

(VOLUNTEERED) Don't know/Not sure



5. Each person's own financial situation is affected by a lot of factors, such as income, savings, investments, cost of living, interest rates, credit and other things. Thinking ahead six months, do you think that your personal financial situation will improve, will get worse OR will stay the same?



31%

Will improve

10

Will get worse

57

Will stay the same

2

(VOLUNTEERED) Don't know/Not sure



6. Thinking about the big things that people buy -- such as furniture, major appliances, cars, computers, large television sets, sound systems, and other items like that. Generally speaking, do you think now is a good time OR a bad time for people to buy these major items?



41%

Good time

43

Bad time

10

(VOLUNTEERED) Neither/somewhere in the middle

6

(VOLUNTEERED) Don't know/Not sure



7. Let's now turn to looking at the nation as a whole. On the basis of what you've seen, read, or heard - would you say that current NATIONAL business and economic conditions in the United States are mostly GOOD - OR - would you say they're mostly BAD?



19%

Mostly good

63

Mostly bad

14

(VOLUNTEERED) Neither mostly good nor mostly bad

4

(VOLUNTEERED) Don't know/Not sure



8. ASKED OF HOMEOWNERS: Looking ahead six months, do you expect the value of your home to increase, to decrease, OR to stay the same?



30%

Increase

11

Decrease

57

Stay same

3

(VOLUNTEERED) Don't know/Not sure



9. ASKED OF HOMEOWNERS: Do you expect that you, or the head of your household if not you, will spend more than $5,000 repairing, improving, renovating or decorating your home during the next six months?



32%

Yes

65

No

3

(VOLUNTEERED) Maybe

1

(VOLUNTEERED) Don't know/Not sure



10. ASKED OF HOMEOWNERS: Do you expect to try to sell your home during the next six months?



4%

Yes (include those who say their house is currently for sale)

94

No

1

(VOLUNTEERED) Maybe

*

(VOLUNTEERED) Tried to sell, but couldn't, took it off market

1

(VOLUNTEERED) Don't know/Not sure



11. ASKED OF THOSE WHO SAID THEY RENT OR LIVE WITH FRIENDS OR RELATIVES: Looking ahead six months, would you say that you DEFINITELY plan to buy a house or condo regardless of real estate market conditions, OR, would you say that you MAY buy a house or condo depending upon real estate market conditions, OR would you say that you have no plans to buy a house or condo?



10%

Definitely will buy

18

May buy

69

No plans to buy

2

(VOLUNTEERED) No, not sure about buying a new home

1

(VOLUNTEERED) No answer



12. Thinking again about the big things that people buy - such as furniture, major appliances, cars, computers, large television sets, sound systems, and other items like that, do you expect that you or someone in your household will buy such a major item during the next six months?



31%

Yes

63

No

5

(VOLUNTEERED) Maybe

1

(VOLUNTEERED) Don't know/Not sure



13. Do you expect that you or someone in your household will buy or lease a new car, van or small truck during the next six months?



12%

Yes

84

No

4

(VOLUNTEERED) Maybe

1

(VOLUNTEERED) Don't know/Not sure



14. ASKED OF THOSE WHO SAID THEY WORK FULL- OR PART-TIME: Looking ahead six months, do you expect that the primary place where you now work will likely increase the number of its employees, will likely decrease the number of its employees, OR will likely keep the number of its employees the same?



29%

Increase

14

Decrease

54

Keep same

3

(VOLUNTEERED) Don't know/no answer



15. ASKED OF THOSE WHO SAID THEY WORK FULL- OR PART-TIME: Looking ahead six months, what do you expect for your own personal employment situation... Will you most likely keep your current job as it is now - OR - will you most likely get a promotion with more pay - OR - will you most likely lose your current job - OR - will you most likely quit your current job?



74%

Keep current job

14%

Get a promotion

4%

Lose job

6

Quit job

1

(VOLUNTEERED) Don't know, not sure



16. ASKED OF THOSE WHO SAID THEY WORK FULL- OR PART-TIME: Over the past six months, has your salary decreased, has it increased, has it stayed the same but with added benefits or bonuses, OR has it stayed the same without a bonus or added benefits?



12%

Decreased

22

Increased

21

Stayed same/with bonus, benefits

41

Stayed same/no bonus, benefits

4

(VOLUNTEERED) Don't know/no answer



17. ASKED OF THOSE WHO SAID THEY ARE SELF-EMPLOYED:  Looking ahead six months, do you expect the income from your current business to increase, decrease OR stay the same?



43%

Increase

5

Decrease

48

Stay same

4

(VOLUNTEERED) Don't know/no answer



18. Thinking about your current personal finances, which one of the following comes closest to describing what you have been mostly doing over the past six months – spending more money, saving more money, OR paying off more debts such as on credit cards?



20%

Spending more

32

Saving more

31

Paying off more debts

9

(VOLUNTEERED) Combination of above

8

(VOLUNTEERED) Don't know/no answer



19. Last year, Congress passed and the President signed an $800 billion stimulus package designed to improve the nation's economy. Thinking about the effect the stimulus package already has so far had on the economy of the greater Washington DC region… do you think it's had a big positive impact, a small positive impact, a small negative impact or a big negative impact?



11%

Big positive impact

56

Small positive impact

9

Small negative impact

9

Big negative impact

10

(VOLUNTEERED) No impact

6

(VOLUNTEERED) Don't know/Not sure



20. As you may know, local and state governments in the Washington region are having trouble balancing their budgets… how worried are you that budget deficits may hurt the region's economic competitiveness and quality of life in terms of service cuts and tax increases – would you say you are very worried, a little worried, or not worried at all?



32%

Very worried

49

A little worried

18

Not worried at all

1

(VOLUNTEERED) Don't know/Not sure



21. There are a number of proposed and planned transportation projects in the region, such as new highway and street work, H.O.V. "hot" lanes, the Dulles rail, and the Inter County Connector, for example… Given the budget problems of state and local governments, do you think major transportation projects should be cancelled, should be delayed, or should be speeded up?



5%

Cancelled

34

Delayed

44

Speeded up

16

(VOLUNTEERED) Don't know/Not sure



22. Thinking about the health care reform legislation recently passed by Congress and signed by President Obama… Do you think it will make your health care coverage less expensive… or… more expensive?



29%

Less expensive

49%

More expensive

12

(VOLUNTEERED) Neither/won't affect cost

10

(VOLUNTEERED) Don't know/Not sure



23. What about portability of your medical insurance – if you change jobs in the future, do you think the new health care reforms will make it easier to keep your existing medical insurance coverage, do you think it will make it harder to keep your existing medical insurance coverage, or do you think it will have no affect?



26%

Make it easier

19

Make it harder

41

No affect

14

(VOLUNTEERED) Don't know/Not sure/Doesn't apply/Medicare



Survey Presented by Greater Washington Board of Trade

The Greater Washington Board of Trade is the Greater Washington region's premier business network and the only local business association representing all industry sectors.  Founded in 1889, the Board of Trade enjoys a long history of helping its members' businesses grow by providing content-rich programs, connecting business leaders and marketing Greater Washington's economic opportunities.  As Greater Washington's regional business organization, the Board of Trade addresses business concerns that stretch across geographic boundaries, such as transportation, emergency preparedness, green as a competitive advantage and workforce issues.  For more information, visit www.BoardofTrade.org.

Survey Conducted by Clarus Research Group

Clarus Research Group is a full-service and nonpartisan survey research firm based in Washington, D.C. Clarus provides a full range of polling and market research services to corporate, association, nonprofit and public affairs clients. Clarus conducts public opinion surveys, focus groups, branding studies and media research.   Dr. Ron Faucheux, who also teaches at the Public Policy Institute at Georgetown University, is president of Clarus.  For more information, visit www.ClarusRG.com.

Survey Sponsored by Tatum

Companies turn to Tatum when critical business challenges arise because we immediately deliver financial and technology operational expertise via solutions tailored to the Office of the CFO. We leverage nearly 1,000 executives and consulting professionals nationwide to accelerate results and create more value™. For more information, visit www.TatumLLC.com.

SOURCE Greater Washington Board of Trade



RELATED LINKS

http://www.bot.org


http://www.clarusrg.com


http://www.tatumllc.com