GAINESVILLE, Fla. – March 26, 2014 – Floridians’ consumer confidence rose three points this month to 81, tying a post-recession high last reached in May and June of last year, according to a new University of Florida (UF) survey.
“An index number of 81 is modest when looking at the entire history of the index, but it’s as high as we have achieved since before the recession began in December 2007,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research, which conducts the survey.
“This increase is consistent with our expectations that consumer sentiment among Floridians would remain near post-recession highs, given relatively good economic news,” including a federal budget extension passed by Congress.
Consumers’ overall belief that their personal resources are better now than a year ago rose 10 points to 73 – the highest level since August 2007, shortly after the Great Recession began.
Their expectation of being better off financially a year from now also increased, rising six points to 82. Confidence in the nation’s economy for the coming year increased five points to 84, while trust in its performance over the next five years remained unchanged at 79.
Only one of the five survey components declined. Respondents’ verdict on whether now is a good time to buy major household items fell four points to 86.
There are other signs of an improving Florida economy. Florida’s 6.1 percent unemployment rate in January dropped two-tenths of a percent from December, which was four-tenths of a percent lower than the national 6.4 percent rate. Meanwhile, both Florida’s labor force and the number of employed grew during the same period.
“Florida’s tourism industry has benefited from a harsh winter in the north and is making some gains in shifting to higher technology jobs, including biotechnology,” McCarty says. “This shift will be important as Florida attempts to diversify its economy to include economic sectors less subject to recessionary effects from other states.”
The state’s retail sales outperformed the national average in January in part, because severe winter weather elsewhere limited shopping. And Florida’s inflation rate is lower than elsewhere in the country where cold weather triggered fuel price increases.
The median price for an existing Florida single-family home rose $2,500 from January to $165,000 in February, a 10 percent increase from a year ago. Although housing prices remain about 36 percent off their peak value in June 2006, they are stable.
McCarty predicts that the biggest threat to the economy and consumer confidence in the near future will come from Russia, not Washington. “For many U.S. consumers, especially those who remember the Cold War, the image of Russian tanks moving through Europe is all too familiar,” he says. “The Russian move on the Ukraine is the kind of news that can have at least a temporary effect on consumer sentiment.”
Conducted March 14-25, the UF study reflects the responses of 416 individuals representing a demographic cross-section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
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