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Tepid optimism among Utah consumers

Tepid optimism among Utah consumers

Estimated read time: 3-4 minutes

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SALT LAKE CITY — Utah consumers expressed tepid optimism this month regarding the state's economic fortunes.

The Zions Bank Consumer Attitude Index climbed 0.7 points to 79.7 in June, while the U.S. Consumer Confidence Index fell 2.4 points to 62.0 — a 17.7-point differential. The CAI was up 13.5 points compared to the same time last year.

The Consumer Price Index rose 0.5 percent from April to May. The index has climbed 2.6 percent over the past 12 months, compared to 1.7 percent nationally.

The Zions Bank Present Situation Index — a measurement of confidence in current business and employment conditions — increased 0.3 points in June, compared to a 1.7 point increase nationally.

The Zions Bank CAI is based on a representative sample of 500 Utah households. The monthly survey is conducted by the Cicero Group/Dan Jones & Associates with a confidence interval of plus or minus 4.38 percent.

"The fundamentals necessary for economic recovery are there," said Randy Shumway, chief executive officer of the Cicero Group. "However, a series of things are compounding on one another … the debt crisis in Europe, slowing economic growth in China and the U.S. presidential election."

The fundamentals necessary for economic recovery are there. However, a series of things are compounding on one another … the debt crisis in Europe, slowing economic growth in China and the U.S. presidential election.

–Randy Shumway

Shumway explained that the negativity from political wrangling is "creating a spirit of pessimism" among consumers. He added that consumer confidence is expected to improve in 2013, but through the end of this year, economic growth will likely be inconsistent.

Meanwhile, the housing sector continues to recover at a slow, but sustained pace, he said.

"The national housing market started gathering momentum earlier this year, and maintained consistent growth through the first six months of 2012," Shumway said. "Nearly 83 percent of Utahns believe that the price of homes like theirs will stay the same or increase over the next 12 months — a 15 percentage point increase from a year ago at this time."

Utahns’ confidence in the housing market reflects national and local trends, he said.

"The last five years have been very painful because of the (lack of) confidence that buyers have had in the economy," said Bryson Garbett, president and chief executive officer of Salt Lake City-based Garbett Homes. "All the (local) builders have had to suffer through those tough times."

Garbett said business has begun to improve dramatically over the past year, thanks to lower interest rates and improved affordability in the Utah housing market.

"Since August of last year, our sales have increased by (nearly) 100 percent," he said. "The economy has changed."

Shumway said that gasoline prices have been an anchor on consumer spending and confidence for most of 2012. But in May, fuel prices in Utah stabilized, even though Utahns were still paying about 20 cents more per gallon than the rest of the country.

Now, consumers are expecting gas prices to come down after four months of price increases, he said.

The percent of Utahns who think gasoline prices will go up over the next 12 months is down 20 percentage points from three months ago, Shumway said. National trends indicate that gasoline prices will likely fall over the next few months in Utah, he said.

Shumway also noted that Utahns are more secure in their employment than they have been in quite some time, which is an important factor in consumer attitude and economic confidence.

"Seventy-three percent of Utahns think that it is unlikely that they are going to lose their job in the next two years," he said. "There is underlying optimism."

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Jasen Lee


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