Roanoke College Poll: Virginia Consumer Sentiment and Inflation Expectations

SALEM, Va., Nov. 27, 2012 /PRNewswire/ -- The Roanoke College Institute for Policy and Opinion Research (IPOR) surveyed 651 Virginians about their financial situation, general business conditions now and in the future, their inclination for purchasing durable goods, and their thoughts on prices in the near-term.

Virginia continues to improve, concerns over future

The Virginia Index of Consumer Sentiment (VAICS) is 81 in November, down from February 2012, but significantly higher than a year ago. The current value is in line with the national number of 82.7. Consumer sentiment has plateaued nationally, although is it is at the highest level since September 2007.

Virginians report that household finances and business conditions are improved from a year ago, pushing the Virginia Index of Current Conditions (VAICC) up 4 points from February to 82. This is a good sign for holiday retail sales. The nation is also more positive about current personal finances and business conditions.

The drop in the VAICS is driven by a substantial reduction in Virginians' expectations of the future. The Virginia Index of Consumer Expectations (VAICE) is 79 in November, down 9% since February 2012. Consumer worries about the impending fiscal cliff and economic uncertainty could be behind the drop. Virginia is in line with the nation, as national expectations fell in November.

Northern Virginia falters, Central Virginia and Shenandoah Valley surge

Sentiments varied across the Commonwealth. The Shenandoah Valley was positive about today and the future. Specifically, Shenandoah Valley's VAICS increased by 15% since February, primarily from a 38% increase the VAICC. New job announcements from the McKesson Corporation, Navy Federal, and McKee Foods could be driving the optimism. Northern Virginia (NOVA) experienced drastic reductions in all indexes, particularly the VAICE, which fell by 21%. NOVA's indexes were higher than the Commonwealth average for the past year. Currently NOVA ranks amongst the lowest regions in the state.

Virginia inflation expectations fall

Virginia's inflation expectation for next year is 2.2%. The long-term outlook is 3.6%. Seventy-six percent of Virginians believe that prices will increase over the next 5-10 years. Inflation expectations, both short- and long-term, have fallen over the year. National short-term inflation expectations are 3.1%, while the 5-10 year expectation is 2.8%, both significantly unchanged over the last few months.

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SOURCE The Roanoke College Institute for Policy and Opinion Research