Fort Smith regional residents are growing more pessimistic about their personal finances and the health of the overall economy — a reality possibly fueled by the news Whirlpool will close its Fort Smith manufacturing plant.
The Consumer Compass Report, an offshoot of The Compass Report managed by The City Wire and presented by Benefit Bank, has historically reflected national consumer sentiment trends.
The closely watched University of Michigan preliminary index of consumer sentiment was most recently at a six month high of 67.7.
But a Dec. 6 survey of Fort Smith area residents shows that 57% believe local economic conditions will get worse in the next 12 months, well above the 50.5% surveyed Sept. 8 and close to doubling survey results (31.5%) from Nov. 29, 2010. The Dec. 6 survey found 61% of respondents believing the U.S. economy will be worse in the next year, down slightly from 62% in the Sept. 8 survey, but higher than the 46.5% in the Nov. 29, 2010 survey.
“My initial reaction is that the psychological pounding of the Whirlpool situation has had an effect on residents views' of the community and nation,” said Roby Brock, with Talk Business Research and owner of Talk Business.
Benton Harbor, Mich.-based Whirlpool announced Oct. 27 it would close its Fort Smith refrigerator manufacturing plant by mid-2012. The loss of the about 1,000 Whirlpool jobs in Fort Smith will result in the overall loss of 1,550 jobs and a labor income reduction of $56.9 million, according to economic impact figures provided by the University of Arkansas at Little Rock. Whirlpool employed more than 4,500 in the Fort Smith plant in early 2006.
Results from the Dec. 6 Consumer Compass survey also show that only 10.5% of respondents believe their personal finances will improve in the next 12 months, down from 12% in the Sept. 8 survey, and down from 16% in the Nov. 29, 2010 survey.
“On the personal financial situation, while still very negative, the numbers did not dip significantly lower on future outlook. That tells me that they may not be directly affected by Whirlpool or related happenings, but they are aware of it and it has worsened their attitudes on future economic prospects,” Brock said.
The Whirlpool effect is evident in the survey, said economist Jeff Collins.
“Local attitudes about the economic outlook likely reflect recent economic news for the region,” Collins noted.
But Collins said past pessimism did not always translate into reduced spending. For example, tax collections of Fort Smith’s 1% street tax totaled $16.121 million in the January-October period, up 3.02% compared to the 2010 period.
Also, 46% of respondents believe the actions and policies of federal government officials are bad for business and job growth, while 31% think the same of local government actions and policies and 37% think the same of state actions.
The Consumer Compass Report — The City Wire Poll
Conducted by Talk Business Research and Hendrix College on Dec. 6. There were 523 respondents in the Fort Smith region.
Margin of Error +/- 4.1%
Q1. How would you describe your personal financial situation? Are you better off financially, worse off, or about the same as you were one year ago?
5% Don’t know
Q2. Now looking ahead — do you think that one year from now your personal financial situation will be better off, worse off, or about the same?
12.5% Don’t know
Q3. Turning to business conditions in the Fort Smith region as a whole — do you think that during the next year, local business conditions will get better, get worse or stay about the same?
8.5% Don’t know
Q4. What about the U.S. economy? During the next year, do you think business conditions in the United States will get better, get worse or stay about the same?
8% Don’t know
Q5. Considering the regional business environment, do you believe the actions and policies of county and local governments in the Fort Smith region are good for business and job growth, bad for business and job growth, or somewhere in between?
41% OK, but could be better
19% Don’t know
Q6. Considering the state business environment, do you believe the actions and policies of state government officials — elected and appointed — are good for business and job growth, bad for business and job growth, or somewhere in between?
39% OK, but could be better
14% Don’t know
Q7. Considering the national business environment, do you believe the actions and policies of federal government officials — elected and appointed — are good for business and job growth, bad for business and job growth or somewhere in between?
41% OK, but could be better
8.5% Don’t know
Notes on Raw Data:
2% Under the age of 30
10% Between the ages of 30 and 44
37% Between the ages of 45 and 64
51% 65 or older
2% African American
2% Asian American
91% Caucasian or White
64% Less than $50,000
22% $50,000 - $75,000
9% $75,001 - $100,000
5% More than $100,000
37% High school degree or less
35% High school degree and some college, but no degree
10% Two-year (associate’s) degree
11% Four-year college degree
7% Masters degree or higher