UF Economists: Strong Florida Economy Fuels Rebound In Retail Sales

September 30, 1997

GAINESVILLE — Florida’s consumer confidence continued its uphill trend in September, fueling a rebound in retail sales and expectations of a prosperous holiday season for retailers, University of Florida economists report.

The preliminary consumer confidence index for the month rose to 101, gaining one point from August and reaching a new eight-year high, said economists with UF’s Bureau of Economic and Business Research, which conducts the survey.

“Retailers planning for Christmas should note that Floridians’ confidence is now nine points higher than the 92 registered in September 1996,” said UF economist Dave Denslow. “If confidence holds at 100 or more, holiday sales should exceed last year by 4 or 5 percent.”

Forecasts based on July and August data suggest that third-quarter retail sales will be much higher than the second quarter, said Chris McCarty, the bureau’s survey director.

“This is the type of spending you would normally expect when consumer confidence is high,” McCarty said. “Florida’s high confidence levels mirror what we are seeing at the national level as measured by the University of Michigan and the Conference Board.”

Sales of existing homes in Florida are up and expected to exceed last year’s sales as consumers take advantage of continuing low interest rates, McCarty said. New home sales also appear strong compared with last year, and outstanding consumer credit — while still growing — appears to be slowing significantly, he said.

Confidence in the three regions varied significantly. Both north and southwest Florida registered no change, while the overall index dropped two points in Central Florida to 103 and gained five points in southeast Florida from 95 in August to 100 in September.

The rise in southeast Florida is due primarily to increases in perceptions of personal finances and a dramatic increase in the perception of whether it is a good time to buy big-ticket items, McCarty said. The latter component rose from 108 in August to 118 in September.

“When we calculate consumer confidence regionally, we often see the trend in southeast Florida running differently than the other regions of the state,” McCarty said. “On the other hand, this region also has the highest margin of error because you tend to get more varying responses there than elsewhere. This is caused by the diversity of southeast Florida in terms of income and other socio-economic factors.”

Employed Floridians gave mixed reports of business activity. Forty-eight percent — 1 percent more than in August — said business activity was better than at the same time a year ago. But the share who expected extra employees to be hired at their workplace in the next six months fell for the second time in as many months, suggesting that the state may be approaching statistical full employment, McCarty said.

In July, 37 percent of respondents expected extra employees to be hired at their workplace in the next six months, falling to 33 percent in August and 31 percent in September.

“Over the past couple of years, employment opportunities were widespread due to the healthy economy,” McCarty said. “At some point, we would expect this trend to level out. Our respondents may be telling us that we should expect fewer jobs to be available over the next year, compared to last year.”

The Florida Consumer Attitude Survey is conducted monthly by the bureau. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for September was calculated from 987 responses. Numbers for prior months are based on about 1,000 responses.

The margin of error for the statewide index is two points, while that for the regions is higher, ranging between four and five points.