Consumer sentiment has not changed much since summer, and almost half of the Arkansas respondents to Arvest's Fall 2014 Consumer Sentiment Survey believe the next six months would be a good time to make a major purchase of household items.
The study, which looks at the Arkansas consumers' outlooks on personal finances, buying conditions over the next six months, as well as business conditions in the next year and the next five years, found that 54% of Arkansans expect their personal financial situation to be unchanged during the next year. Another 26% expect some level of improvement during the same period.
Compared to June's survey, the numbers are slightly changed with 52% over the summer believing their situation would remain unchanged and 28% expecting improvements.
The current figures are slightly off the region (Missouri and Oklahoma), which saw 51% of respondents believing their personal financial situation would remain unchanged over the next year while 29% expected some level of improvement.
Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas in Fayetteville served as the lead economist for the survey. She labeled the feedback from consumers resulting in an increase in the Arkansas Consumer Sentiment Index as a "mixed bag," adding that consumers expect improvement in the economy.
"Arkansans were a bit more negative about their personal finances, but saw October as a good time to buy things," she said. "Near-term economic expectations were more muted, but over the longer term, Arkansans expect some improvement."
In the area of big purchases, the survey found that 46% of Arkansans thought the next six months would be a good time to buy big-ticket items like furniture, televisions and refrigerators, up for 42% in June. Regionally, 50% believed the period would be a good time to buy big-ticket items, an increase of 3%.
Regarding business conditions, numbers in October were essentially flat from June with 23% believing the next year would be good for businesses and 32% believing the same for the next five years. The numbers in June were 22% and 33%, respectively. Regionally, 25% believed the next year would be good for business with 36% believing the next five years would be good, down 4% and 1% respectively from June.
Respondents to the Arvest Consumer Sentiment Survey were also asked "How is your current financial situation compared with a year ago?" and "What do you think of buying conditions over the next six months?" to create a Current Conditions Index for Arkansas, which rang in at 76.3 in October compared to 74.7 in June. The regional index sits at 82.
A Consumer Expectations Index was also created by asking the following questions - "How do you expect your financial situation to change in the next year?""How do you think business conditions will be in a year?" and "How do you expect business conditions will be in five years?" The index came in at 62.9 in October, a slight improvement from June's 62.7. The regional index stands at 66.5.
After the June figures were released showing similar figures to October's, Deck said it showed that the improving economy was not translating to improving consumer sentiment.
“What is so interesting to see in this set of data are the consistent numbers across the region and within each of the states. We’ve seen that incomes, debt loads, spending and expectations are all about the same across the region. The majority of consumers in Arkansas, Missouri and Oklahoma really do not see their economic situations changing in any significant way over the foreseeable future. That tells us that the economic recovery being reported in other areas of the country has not yet made it to our region’s working families in a measurable way,” said Deck.
Arvest conducts the survey’s twice annually and compiles three separate data sets. This is the third and final report from the June and July surveys. The first two data releases indicated Arkansas respondents were more cautious than those surveyed in Oklahoma and Missouri.
The next survey is expected to be completed in May 2015.