Regional Economic Sentiment Hits High Mark
FAYETTEVILLE, Ark. (May 17, 2016) – Regional consumer opinion regarding the economy increased slightly from September to March, according to the Spring 2016 Arvest Consumer Sentiment Survey released today.
The current regional index for Arkansas, Oklahoma and Missouri – including Greater Kansas City – is 83.4, up from September's index of 82.6. This regional index score marks the first time since the survey began in early 2014 that all three states have had indices above 80, and is the highest regional index recorded – slightly above the 83.2 from March 2015. The national index was 90.0 for March, up from 87.2 in September, as reported by Thomson Reuters and the University of Michigan.
Of the three states included in the Arvest Consumer Sentiment Survey, only Arkansas reported an increase in overall consumer sentiment, from 77.8 in September to 84.9 in March. Missouri and Oklahoma both reported decreases, from 85.8 in September to 83.9 in March in Missouri, and from 85.0 to 81.3 during the same period in Oklahoma.
Kathy Deck, Director of the Center for Business and Economic Research (CBER) at the University of Arkansas, said the outperforming Arkansas economy had boosted consumer confidence in the state enough for a notable achievement in the Arvest Consumer Sentiment Survey.
"For the first time since the inception of the Arvest Consumer Sentiment Index, Arkansas consumers reported the highest levels of consumer sentiment in the region," said Deck, who also is the lead economist for the survey. "The state's improving employment and income situation in both metropolitan and rural areas meant that both higher- and lower-income residents had reasons for optimism."
The differing levels of enthusiasm across the region reflected the various structures of each states' economies, particularly in relation to their dependence on employment in the energy sector.
In Oklahoma, Russell Evans, Director of the Steven C. Agee Economic Research & Policy Institute at Oklahoma City University, said weakness in the state’s oil and gas industry continues to burden state budgets and rural economic activity with expectations firming for more of the same for the rest of the year.
"The harsh economic reality facing Oklahomans in 2016 is finally reflected in the consumer sentiment responses as the index contracted sharply from a reading of 85.0 to 81.3," Evans said. Dr. David Mitchell, Director of the Bureau of Economic Research at Missouri State University, said Missouri consumers wildly differed in their economic opinions when the survey was first conducted in 2014 depending upon demographic groups.
"When the survey was first completed, there was a large gap in consumer confidence between families who earn less than $75,000 a year and those who earn more than $75,000 a year," Mitchell said. "The higher-income households were more confident in the economy by more than 20 points. Now this gap has closed to only 0.7 points."
"It would seem that lower-income households are continuing to respond positively to external economic stimuli such as lower gas prices, while higher-income households are beginning to feel more cautious — or, at least, curbing their enthusiasm for the current state of the economy."
The regional results from this round of surveys showed a general improvement in consumer sentiment as the regional index and Arkansas index were more in line with the national index.
"In this survey the region has shown positive movement with all three states being relatively close to each other and the overall sentiment of the region remaining relatively close to the national index," Arvest Marketing Director Jason Kincy said. "When we released the first regional index in early 2014 there was an 11-point gap between the national and regional index scores. This time last year, the gap was almost 10 points and now it is only 6.6. Although there will always be a bit of divergence between the national and regional numbers, the trend is moving in a positive direction across the three-state area."
The Arvest Consumer Sentiment Survey is conducted by the CBER in the Sam M. Walton College of Business at the University of Arkansas. The University of Oklahoma’s Public Opinion Learning Laboratory conducted the 1,200 random phone and online surveys. The CBER, Missouri State University and Oklahoma City University provided state data analysis.
The survey is conducted twice a year, with the next survey expected to conclude in August. With each study, the index score will be released first, followed by additional information regarding specifics of consumer outlook for the near future and plans for savings and spending.
Information about the survey, copies of this release, summary documents and print-ready logos can be found at www.arvestconsumersurvey.com.