Utah consumers remain upbeat regarding local economy

Utah consumers remain upbeat regarding local economy

(Britnee Johnston, Zions Bank)


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SALT LAKE CITY — Utah consumers continue to have a positive outlook about the state's economic fortunes, a new survey showed.

The Zions Bank Utah Consumer Attitude Index decreased slightly by 1.6 points to register at 114 in November. The index continued to show high confidence from consumers about the strong-performing local economy.

Speaking Tuesday at a monthly news conference, Zions Bank economic adviser Randy Shumway noted that this is the fourth month in a row the index has registered at or above the 110 mark — a sign of a very robust economy.

In comparison, the national Consumer Confidence Index decreased 8.7 points from October to November to sit at 90.4.

The Zions index is based on a representative sample of 500 Utah households surveyed by Cicero Group at a confidence level of plus or minus 4.4 percent. The latest data are compared to both state and national data from previous months to identify key consumer sentiment trends throughout Utah.

Shumway said the strength of the current economy suggests a positive, upward trend heading into the all-important holiday shopping season.

"Most economists are forecasting that holiday spending is going to increase 3.7 (percent) over last year," he said. "As people spend, it creates jobs and generates increased production. For people's confidence to be at the rate that it is going into the holiday season connotes that we're going to see accelerated holiday spending — which is really positive."

Meanwhile, he noted that two subcategories of the index contributed to the minor decrease in the overall index, showing that consumers may be slightly less confident in current and future economic conditions in Utah.

Aaron Thorup, Zions Bank
Aaron Thorup, Zions Bank

The Present Situation Index, a sub-index that measures how consumers feel about current economic conditions, rose 1.4 points for the same period last year. Shumway said more than half of Utahns rate general business conditions in their area as good.

However, expectations for the next six months were not quite as optimistic due primarily to a less positive outlook on the labor market and employment situation, he noted.

Slightly more Utahns believe business conditions in their area will improve over the next six months, and more people expect their household income to be higher six months from now, the survey showed. However, 58 percent expect their income to remain the same.

In spite of recent price declines, a majority of consumers still expect gasoline prices to start edging upward again over the next 12 months, Shumway noted. But those expectations may not be accurate, he said.

Local fuel prices typically trail the national trend by six to eight weeks, he explained. Therefore, while the national average price of regular unleaded gas sits at $2.06 per gallon compared with $2.17 per gallon in Utah, local gasoline prices should continue to fall but remain above the national average for the next couple of months, he said.

"So we know that we're going to see prices around the country drop below $2 a gallon," Shumway said. "(That means) Utah is not far behind."

Oil prices, which impact gasoline prices, fell fairly steadily throughout October and November with high global production contributing to an oversupply on the market, he said. U.S. production is expected to decline, and global oil supply will likely remain constant, continuing to push prices lower, Shumway added, with current crude oil futures trading for about $46 per barrel.

Shumway said 2015 has been characterized as particularly strong economically — especially in Utah. Barring any unexpected political gridlock nationally or devastating global turmoil, the coming year could be equally solid, he said.

"Another year like this would give us a stronger footing for years to come," Shumway said.

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