Arvest Newsroom

Consumers Positive about Personal Finances, Purchasing Plans

FAYETTEVILLE, Ark. (June 7, 2016) — Consumers in Arkansas, Missouri and Oklahoma are more optimistic that their personal financial situation will improve within the next year than in the previous survey conducted last year. More than half of those surveyed also continue to believe the next six months will be a good time to purchase major household items.

These observations are found in the second phase of the Spring 2016 Arvest Consumer Sentiment Survey, which was conducted in March and released today. This phase includes a study of consumers' outlooks on personal finances, buying conditions over the next six months, and business conditions over the next year and the next five years.

Overall results indicate 88 percent of the respondents in the three-state area, including Greater Kansas City, expect their personal financial situation to remain the same or improve over the next 12 months, up one percentage point from the survey in September.

Specifically, consumers showed improved confidence in their personal financial situation, with 38 percent of respondents expecting improvement in that regard over the next 12 months. That's up five percentage points from the 33 percent reported in September. Those who expect their situation to remain the same fell from 54 percent to 50 percent.

More than half – 53 percent – of those surveyed, expect the next six months to be a good time to buy household items such as furniture, televisions and refrigerators. That’s down from 55 percent in September.

"It is fascinating to watch consumers' confidence grow in relation to the good economic news we had been accustomed to seeing reported around the country," Arvest Marketing Director Jason Kincy said. "Many may have been waiting a while to replace or upgrade major consumer products in their homes until they felt more confident in the region’s economy. Now, by tracking how that sentiment has increased, we can be ready to assist them with those major purchases through consumer loans or strategic savings strategies."

Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas and lead economist for the survey, credited growth in the state’s labor force and a decline in unemployment for the uptick in Arkansas.

"Arkansans reported particular strength in their outlook for their personal finances, which bodes well for retail sales and tax collections in the state," Deck said.

In Missouri, David Mitchell, director of the Bureau of Economic Research at Missouri State University, said relative weakness in the stock market has made consumers more uncertain about the future.

"It is also likely that continued political uncertainty is having an effect," Mitchell added.

Russell Evans, director of the Steven C. Agee Economic Research & Policy Institute at Oklahoma City University, blamed "adverse economic headlines" for stronger uncertainty in his state.

"Any improvement in local economic activity that would give rise to nascent state optimism will likely have to wait until the second half of the year," Evans said.

When looking at expectations of business conditions, regional respondents were both less optimistic and less pessimistic with the percent of respondents who are "uncertain" about business conditions rising from 27 percent to 47 percent. As a result, the percent who expect business conditions to be favorable fell from 32 percent in September to 24 percent in March, while those who expect business conditions to be bad in the next 12 months fell from 41 percent to 28 percent.

Expectations changed when expanding the time period to five years, with 41 percent of those surveyed anticipating good times, down just two percentage points from September.

This round of survey results also includes a Current Conditions Sub-Index and a Consumer Expectations Sub-Index, which follows the model of the national Thomson/Reuters Michigan Surveys of Consumers.

These sub-indexes are meaningful in comparison to national indexes or to previous values of Arvest Consumer Sentiment indexes. Higher numbers indicate some combination of consumer satisfaction with their current and expected personal finances, current and expected economic performance, and the purchasing environment. Larger increases indicate more confidence across the three areas.

The Current Conditions Sub-Index is tabulated from the answers to two questions on the survey: "How is your current financial situation compared with a year ago?" and "What do you think of buying conditions over the next six months?" The Current Conditions Sub-Index for the region is 90.3 in March, unchanged from September.

The Consumer Expectations Sub-Index is tabulated from the answers to three survey 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 regional Consumer Expectations Sub-Index dropped from 78.9 in September to 77.5 in March.

The Arvest Consumer Sentiment Survey is conducted by the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas in Fayetteville, with the University of Oklahoma's Public Opinion Learning Laboratory conducting 1,200 phone and online 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 August. 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.

Information about the survey, copies of this release, summary documents and print-ready logos can be found at www.arvestconsumersurvey.com.