UF: Florida's consumer confidence stays level for first time in months

May 31, 2011

GAINESVILLE, Fla. — Consumer confidence among Floridians remained at 68 in May, ending three consecutive months of decline, according to a new University of Florida survey.

“While the overall consumer confidence index has declined steadily over the last several months and remained flat this month, there has been some uncharacteristic volatility in the individual components,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “Of particular interest are the changes in perceptions of personal finances. This month, there was a decline in perceptions of personal finances now compared to a year ago, while expectations of personal finances increased from a record low in the release last month. We attribute most of these changes to fallout from the Florida budget.”

Three of the five index components increased or remained the same. Perceptions of respondents’ personal financial situation expected a year from now experienced the largest increase, rising three points to 76. Perceptions of U.S. economic conditions over the next year (66) and perceptions of U.S. economic conditions over the next five years (72) remained the same.

Confidence in purchasing big-ticket items such as cars and appliances fell one point to 74, and perceptions of personal financial situation now compared with a year ago fell four points to 52.

Although April brought some positive signs of recovery, McCarty said the economic environment is still mixed. Unemployment dropped to 10.8 percent — the lowest in Florida since 2009 — but the rate is still one of the highest in the country. Median housing prices rose to $132,700, but McCarty said prices could decline as a backlog of foreclosures moves through the courts. Gas prices have declined the past two weeks, but should rise again with the summer travel season approaching.

“Looking ahead, Florida is once again at a crossroads,” McCarty said. “It is critical that he job situation in Florida continues to improve. Although there have been gains associated with a recovery in tourism, there are several thousand layoffs looming in the public sector and associated industries. These will likely show up in the unemployment rate for July or August. This will likely keep consumer confidence at relatively low levels in the upper 60s.”

The research center, a part of the Warrington College of Business Administration, conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for May was collected from 403 responses.

The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest possible is 150.

NOTE: The Florida consumer confidence release will change in the upcoming months. Consumer confidence is a survey-based measure that until now has relied on landline telephone survey respondents. While our results have always been adjusted for geographic representation by county, we have not adjusted for demographic over and under representation. Over the past five years, the growth in the proportion of households that use only cell phones has increased dramatically and not equally across demographic groups. Cell phone-only households tend to be younger, mobile and disproportionately members of minority groups. Consumer confidence is not the same across these groups. Given the recent release of accurate data on age and demographic groups within Florida from the 2010 Census, our future releases will adjust for geography, age, race and ethnicity. In the coming months, we will release adjusted data series going back to 2000, before the transition of households from landlines to cell phones was common.

Future releases will include two sets of series, those weighted for geography alone and a new series weighted for geography, age, race and ethnicity. These newly weighted data will yield a more accurate picture of Florida’s consumer confidence.