Regional Consumers Report Increase In Savings Rates
FAYETTEVILLE, Ark. (Dec. 15, 2015) – Arkansas, Missouri and Oklahoma consumers have been saving more money as a whole, and some of them plan to spend part of it in the next six months.
That's according to final information released today from the Fall 2015 Arvest Consumer Sentiment Survey. The survey, conducted in September, polls consumers in the three states – including Greater Kansas City – where Arvest Bank operates. This installment focuses on consumers' attitudes concerning spending, saving and debt.
Consumers within the region reported they are saving 13.6 percent of their earnings, which is higher than the 12.4 percent reported when the last survey was conducted in March. Arkansas and Oklahoma reported the highest savings rates (13.9 percent), while Missouri reported a rate of 13.1 percent.
The majority of regional respondents, 71 percent, expect to maintain their current savings rate over the next six months and 20 percent expect to increase their savings rate. Only 8 percent expect to decrease their savings rate.
The percentage of those planning to make major purchases in the next six months, meanwhile, rose from 25 percent in March to 28 percent in September. Among the 72 percent who do not plan major purchases in the next six months, 17 percent reported they were waiting for the right time to buy, while 83 percent said they had no plans to buy at all. Major household purchases were defined as furniture, a television, refrigerator or other large items.
"Seeing an increase in consumers' plans to make major purchases in the next six months should be good news to businesses and retailers in the region," Arvest Marketing Director Jason Kincy said. "Combined with slight increases in consumers taking on new debt, it appears that consumer spending is on the cusp of a slight increase. When you combine this with an increase in the overall savings rate, it appears that consumers are acting responsibly as they move forward in driving the regional economy."
Kathy Deck, director of the Center for Business and Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas and lead economist for the survey, said Arkansans' savings patterns follow national trends.
"It appears that low gasoline prices helped both higher- and lower-income families increase their savings rates," she said.
And while some consumers plan to use at least part of those savings on major purchases in the next six months, two economists involved in the survey noted many consumers remain cautious. Russell Evans, executive director of the Steven C. Agee Economic Research & Policy Institute at Oklahoma City University, said that attitude is "consistent with lingering economic uncertainty."
"In short, they feel pretty good about their own financial situation but are determined to not get caught into a 'debt trap' again," said David Mitchell, director of the Bureau of Economic Research at Missouri State University.
Consumer debt within the region was divided among several categories – mortgage, home equity, auto, credit cards and student loans. A total of 73 percent of respondents reported having consumer debt of some kind, with the biggest increases in home equity loans, which grew from 6 percent in March to 8 percent in September, and in credit cards, up from 38 percent to 40 percent. The percentage of respondents reporting no current consumer debt was 27 percent, compared to 28 percent in March.
The Arvest Consumer Sentiment Survey is conducted by the CBER, with the University of Oklahoma’s Public Opinion Learning Laboratory conducting 1,200 phone surveys.
Arvest Bank's sponsorship of this survey is due to its desire to provide beneficial data for its customers and communities. The data provides a reading of how consumers are feeling about the economy in the states where the bank operates. Additionally, with future results, consumers, as well as the business community, will be able to see how sentiment is trending.
The Bureau of Economic Research at Missouri State University provides state analysis of the Missouri data. The Steven C. Agee Economic Research & Policy Institute, Meinders School of Business at Oklahoma City University, evaluates the data for Oklahoma.
The survey will be conducted twice a year, with the next survey expected to be completed in May 2016. With each study, the index score will be released first, followed by a second release on consumer outlook including the Current Conditions Index and the Consumer Expectations Index and a third release on savings and spending expectations. The survey and indexes follow the model of the national Survey of Consumers produced by the University of Michigan.
Information about the survey and research partners, copies of this release, summary documents and print-ready logos can be found at www.arvestconsumersurvey.com.
Data released as part of the Arvest Consumer Sentiment Survey, summary and news releases is free for broadcast, publication or use in presentations. Please cite "Arvest Consumer Sentiment Survey" as the source each time information is referenced.