Future Expectations Tempered Among Region’s Consumers

(Washington, DC, December 7, 2010) – According to new survey results released today by the Greater Washington Board of Trade, the Greater Washington region’s Consumer Confidence Index fell from 62 to 58, a modest drop of four points since June.

The Greater Washington Board of Trade’s biannual Consumer Confidence Survey indicates the degree of optimism on the state of the local economy. Consumers express their optimism through their perceptions about the economy and personal spending.

The Consumer Confidence Index is comprised of the Index of Current Conditions, which measures how people feel about today’s economic situation in the region, and the Index of Future Expectations, which measures consumer expectations in the region over the next six months.

In the new survey results released today, the Index of Current Conditions improved by 2 index points since June, going from 43 to 45. However, the Index of Future Expectations fell 9 index points, from 80 to 71.

“More consumers in our region feel positive than negative about the future of the region’s economy,” said Jim Dyke, Chair of the Greater Washington Board of Trade and partner with McGuire Woods. “However, the survey results reveal that there continues to be a sense of anxiety among consumers.”

“Consumers are feeling slightly better about current economic conditions in the region today than they did six months ago, but their optimism for additional gains in the near future has tempered some,” said Jim Dinegar, President & CEO of the Greater Washington Board of Trade. “While the region’s latest overall index is still higher than it was two years ago, this is the first time we have had a backslide in the index since the Board of Trade began sponsoring the survey series in December 2008.”

The survey upon which the Consumer Confidence Index is based was conducted Nov. 29-Dec. 2, 2010, for the Greater Washington Board of Trade by Clarus Research Group, a Washington-based survey firm. Clarus interviewed a representative, randomly selected of 1,200 consumers from the District of Columbia, northern Virginia, and the Maryland suburbs. This was the fifth time the survey was conducted and reflects sentiments of local consumers about the region’s economy.

Key findings from the survey:

• JOBS: Only 13% of the region’s consumers believe jobs are “plentiful and easy to find” in the region white 43% say jobs are “scarce and hard to find.”
  
  “The current employment situation continues to be the main drag on consumer confidence in the region,” said Bob Hostettler, Mid-Atlantic Managing Partner of Tatum, LLC, the firm that sponsored the survey for the Board of Trade. “Though local consumers are not happy with the current jobs picture, they have hope for the future. By a margin of 39% to 14%, they expect the region’s employment situation to improve over the next six months.”
   
• CURRENT CONDITIONS: By a margin of 48% to 30%, local consumers see the region’s current business and economic conditions as “mostly good” rather than “mostly bad.”
  
  “The higher the income of consumers, the better they feel about current economic conditions,” said Dr. Ron Faucheux, president of Clarus. “While only 28% of consumers with incomes below $50,000 said they think the present economy in the region was mostly good, a much higher 59% of those with incomes above $100,000 said so.”
• LOOKING AHEAD: According to the survey, 26% of local consumers expect their personal financial situation to improve while only 13% expect it to get worse. Fifty-nine percent of respondents expect their personal financial situation to stay the same.
   
• 2010 HOLIDAY SEASON SPENDING: Only 9% of the region’s consumers plan on spending more this year on the holidays (gifts, travel, decorations, parties, going out to dinner) than they did last year. Fifty-four percent of the region’s consumers plan on spending the same as they did last year, while 36% plan on spending less.
   
• FEDERAL EMPLOYEES: Federal government employees are much more positive about current economic conditions than are other consumers in the region.
  
  “While 59% of federal employees said current conditions are mostly good, only 45% of non-federal employees said so,” pointed out Dr. Faucheux.
  
  Looking ahead six months, however, 38% of federal employees said they expect economic conditions to improve while 21% said they expect conditions would get worse. That compares to 43% of non-federal employees who said they expect conditions will improve while 14% said they would get worse.
  
  “Though federal employees have a more positive view of current economic conditions in the region, they also have a slightly less positive view of where things will go during the next six months,” said Dr. Faucheux. “One possible explanation of this less optimistic outlook on the part of federal employees may be the government pay freeze which was proposed by President Obama right before survey interviewing began.”
  
  (Federal employees in the survey included respondents who identified themselves as employees of the federal government or as spouses of employees of the federal government.)
   
• BUYER’S MARKET: The percentage of consumers saying it’s a good time to make major purchases is 4% higher than it was in June 2010. Now, 45% of local consumers say it’s a good time to buy major items––such as furniture, major appliances, cars, computers, large television sets, and sound systems––while 37% say it’s a bad time.
   
• GREATER WASHINGTON REGION VS. THE REST OF THE COUNTRY: Consumers in the region have a much more positive view of the local economy than they do of the national economy. Of Greater Washington’s consumers, 48% have a positive view of their REGION’S economy and 30% have a negative view. In comparison: 18% have a positive view of the NATIONAL economy and 63% have a negative view. Current consumer perceptions of national economic conditions are nearly identical to what they were in June.
   
• GEOGRAPHIC DIFFERENCES: The District of Columbia’s Consumer Confidence Index is now 15 index points higher than it was in December 2008. Suburban Maryland’s index increased by 9 index points and Northern Virginia’s index increased by 4 index points. The District has the highest Current Conditions Index (48) and Suburban Maryland has the lowest (40). The District also has the highest expectations for future improvement.
   
• RACIAL DIFFERENCES: Whites in the region have a little less confidence in the local economy than do African Americans (57 index points vs. 62 index points) and a little more confidence than do Hispanics (54 index points).
   
• AGE DIFFERENCES: Consumers over 65 have the lowest confidence level (51 index points) and consumers between 30 and 49 have the highest (60 index points).

For complete results, visit: http://www.bot.org/media-center/publications.aspx#consumerconfidence.
 

SURVEY QUESTIONS AND TOPLINE RESULTS:

1. Thinking about the local economy, would you say current business and economic conditions in the Greater Washington D.C. area are mostly GOOD - OR - would you say they're mostly BAD?

a. Mostly good 48%
b. Mostly bad 30
c. Neither good nor bad 17
d. Don't know/Not sure 5

2. Thinking ahead six months, do you think business and economic conditions in the Greater Washington D.C. area will improve, will get worse OR will stay the same?

a. Will improve 41%
b. Will get worse 16
c. Will stay the same 38
d. Don't know/Not sure 6

3. Let me now ask you about the ability of local people to find jobs in the Greater Washington D.C. area... Thinking about current employment conditions in the local market, would you say jobs are plentiful and easy to find OR would you say jobs are scarce and hard to find?

a. Plentiful, easy to find 13%
b. Scarce, hard to find 63
c. Neither/somewhere in the middle 18
d. Don't know/Not sure 6

4. Thinking ahead six months, do you think job opportunities in the local employment market will improve, will get worse OR will stay the same?

a. Will improve 39%
b. Will get worse 14
c. Will stay the same 43
d. Don't know/Not sure 4

5. Each person's own financial situation is affected by a lot of factors, such as income, savings, investments, cost of living, interest rates, credit and other things...Thinking ahead six months, do you think that your personal financial situation will improve, will get worse OR will stay the same?

a. Will improve 26%
b. Will get worse 13
c. Will stay the same 59
d. Don't know/Not sure 2

6. Thinking about the big things that people buy–such as furniture, major appliances, cars, computers, large television sets, sound systems, and other items like that. Generally speaking, do you think now is a good time OR a bad time for people to buy these major items?

a. Good time 45%
b. Bad time 37
c. Neither/somewhere in the middle 11
d. Don't know/Not sure 7

7. Let's now turn to looking at the nation as a whole. On the basis of what you've seen, read, or heard - would you say that current NATIONAL business and economic conditions in the United States are mostly GOOD - OR - would you say they're mostly BAD?

a. Mostly good 18%
b. Mostly bad 65
c. Neither mostly good nor mostly bad 14
d. Don't know/Not sure 2

Asked of homeowners…

8. Looking ahead six months, do you expect the value of your home to increase, to decrease, OR to stay the same?

a. Increase 26%
b. Decrease 12
c. Stay same 62
d. Don't know/Not sure 1

9. Do you expect that you, or the head of your household if not you, will spend more than $5,000 repairing, improving, renovating or decorating your home during the next six months?

a. Yes 28%
b. No 68
c. Maybe 3
d. Don't know/Not sure 1

10. Do you expect to try to sell your home during the next six months?

a. Yes 5%
b. No 91%
c. Maybe 3
d. Don't know/Not sure 1

Asked of renters…

11. Looking ahead six months, would you say that you DEFINITELY plan to buy a house or condo regardless of real estate market conditions, OR, would you say that you MAY buy a house or condo depending upon real estate market conditions, OR would you say that you have no plans to buy a house or condo?

a. Definitely will buy 5%
b. May buy 21%
c. No plans to buy 74%
d. No answer *

ASK ALL:

12. Thinking again about the big things that people buy - such as furniture, major appliances, cars, computers, large television sets, sound systems, and other items like that... Do you expect that you or someone in your household will buy such a major item during the next six months?

a. Yes 33%
b. No 62
c. Maybe 3
d. Don't know/Not sure 2

13. Do you expect that you or someone in your household will buy or lease a new car, van or small truck during the next six months?

a. Yes 10%
b. No 85
c. Maybe 4
d. Don't know/Not sure 2

Asked of those "WORKING PART-TIME" OR "WORKING FULL-TIME"

14. Looking ahead six months, do you expect that the primary place where you now work will likely increase the number of its employees, will likely decrease the number of its employees, OR will likely keep the number of its employees the same?

a. Increase 18%
b. Decrease 16
c. Keep same 64
d. Don't know/no answer 2

15. Looking ahead six months, what do you expect for your own personal employment situation... Will you most likely keep your current job as it is now - OR - will you most likely get a promotion with more pay - OR - will you most likely lose your current job - OR - will you most likely quit your current job?

a. Keep current job 84%
b. Get a promotion 7
c. Lose job 2
d. Quit job 5
e. Don't know, not sure 2

16. Over the past six months, has your salary decreased, has it increased, has it stayed the same but with added benefits or bonuses, OR has it stayed the same without a bonus or added benefits?

a. Decreased 5%
b. Increased 57
c. Stayed same/with bonus, benefits 19
d. Stayed same/no bonus, benefits 26
e. Don't know/no answer 2

Asked of those "SELF-EMPLOYED"

17. Looking ahead six months, do you expect the income from your current business to increase, decrease OR stay the same?

a. Increase 30%
b. Decrease 10
c. Stay same 60
d. Don't know/no answer *

ASK ALL:

28. Thinking about your holiday season spending plans for gifts, travel, decorations, parties or going out to dinner…. do you expect to spend more…less…or…the same this year as you did last year?

a. More 9%
b. Less 36
c. Same 54
d. Don’t know/Not sure 1

___________________________________________________________

Survey Presented by Greater Washington Board of Trade
The Greater Washington Board of Trade is the Greater Washington region’s premier business network and the only local business association representing all industry sectors. Founded in 1889, the Board of Trade enjoys a long history of helping its members’ businesses grow by providing content-rich programs, connecting business leaders and marketing Greater Washington’s economic opportunities. As Greater Washington’s regional business organization, the Board of Trade addresses business concerns that stretch across geographic boundaries, such as transportation, emergency preparedness, green as a competitive advantage and workforce issues. For more information, visit www.BoardofTrade.org.

Survey Conducted by Clarus Research Group
Clarus Research Group is a full-service and nonpartisan survey research firm based in Washington, D.C. Clarus provides a full range of polling and market research services to corporate, association, nonprofit and public affairs clients. Clarus conducts public opinion surveys, focus groups, branding studies and media research. Dr. Ron Faucheux, who also teaches at the Public Policy Institute at Georgetown University, is president of Clarus. For more information, visit www.ClarusRG.com.

Survey Sponsored by Tatum
Companies turn to Tatum when critical business challenges arise because we immediately deliver financial and technology operational expertise via solutions tailored to the Office of the CFO. We leverage nearly 600 executives and consulting professionals nationwide to accelerate results and create more value™. For more information, visit www.TatumLLC.com.

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