More than 40% of Fort Smith regional residents surveyed in the inaugural The Consumer Compass survey say their personal financial situation is worse than it was a year ago.
What’s more, 35.5% of those surveyed expect their personal financial condition to worsen in the next 12 months.
The new survey conducted for The City Wire by Talk Business Research and Hendrix College adds credence to claims by national political pundits and economists that many Americans are pessimistic about the country’s economic future.
Two of the most closely watched national consumer confidence/sentiment reports — the University of Michigan consumer sentiment report and The Conference Board’s Consumer Index — reported relative gains in consumer attitudes but at levels much lower than seen in prior economic recoveries.
“Just one-in-four households reported that their finances had recently improved in the August survey, and just one -in-four expected any improvement in their finances in the year ahead,” noted the Michigan survey released Aug. 27.
The Consumer Compass is a new supplement to The Compass Report — the first comprehensive economic analysis of the Fort Smith region launched by The City Wire and presenting sponsor Benefit Bank in the first quarter of 2009. (Link here for the second quarter The Compass Report originally released Sept. 1.)
The survey seeks to provide insight regarding the personal financial situations of Fort Smith area residents as well as attitudes on the local, state and national economies.
“Too often, the reports on regional economic conditions contain an overwhelming amount of data that makes it difficult to get a clear picture of what is happening and what may happen,” said Tom Kirkham, The City Wire publisher. “Our goal with The Compass Report and now with The Consumer Compass Report is to keep it simple, informative and practical. Adding the consumer survey now brings in the most important opinion of all: that of the hardworking people of this regional economy.”
Roby Brock, executive editor of Talk Business, offered the following observations on the poll results:
• It would appear that Fort Smith area residents are profoundly pessimistic about their personal financial prospects today and looking toward the future. Only 11.5% describe their personal finances as better today than one year ago, while nearly four times as many respondents say their situation has worsened in the last 12 months. The attitudes do not strengthen significantly when looking forward. By a more than 2-to-1 margin citizens see their personal financial situation worsening during the next year (35-14%).
• Local business conditions are a concern for residents. Three times as many residents see conditions worsening locally versus those who see an improvement in the near-term (40-15%). But their views of the U.S. economy — which may be dampening their local views — are even more pessimistic. More than 58% see the U.S. economy worsening during the next year, while only 15% see a better national forecast. The number of people in the Fort Smith region who see the economy remaining the same falls by 50% when comparing local economic conditions to the U.S. as a whole.
• There are hints of optimism about the business environment in the region. While only a small number (12%) say local policies for job growth are good, when combined with those who feel it is "okay, but could be better" the number leaps to 58%. Less than one-third of residents feel local actions and policies related to business and job growth are bad (28%).
• As residents are asked to consider larger government policies related to business and job growth, the confidence numbers slip slightly at the state level and even further at the national level. This suggests Fort Smith residents feel better about local efforts in this arena versus state and national leadership.
Joe Edwards, president and CEO of Fort Smith-based Benefit Bank, said the lack of clear economic growth and results from The Consumer Compass Report is indicative of the uncertainty he sees in business and customer circles.
“This information appears to reflect the huge amount of uncertainty that continues to accumulate with a lot of people today. This type of environment (uncertainty) is not conducive to growth,” Edwards explained.
Jeff Collins, economist for The Compass Report, said the survey results clearly show that Americans see a disconnect between the amount of federal stimulus money spent to improve the economy and the economic results.
“I think there is simply no obvious way to see how the economy turns around. Monetary and fiscal policy has been highly stimulative and yet the employment numbers haven't really moved and, frankly, it is employment that the average person cares the most about. Until employment picks up, people will be hard-pressed to see any light at the end of the tunnel,” Collins explained.
This poll was conducted by Talk Business Research and Hendrix College. The poll, which has a margin of error of +/- 4.5%, was completed using IVR survey technology on Aug. 31, among 475 residents in the Greater Fort Smith region. Our random sample of potential respondents came from a pool of 15,298 residents. The poll was not weighted for any particular characteristics.