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SALT LAKE CITY — Utah consumers are still particularly optimistic about the state’s economic fortunes, though slightly less so than they were last month.
The Zions Bank Utah Consumer Attitude Index declined 7.5 points to register at 109.3 in December, slipping back to its September level after significant increases in recent months. The current index sits 13.2 points higher than the level of a year ago.
Utah consumers are far more confident than consumers nationally, with the national Consumer Confidence Index registering at 92.06 for the month, up 1.6 points from November.
Consumers are more concerned about job availability, but attitudes are still quite high in Utah and indicate a strong economy, explained Zions Bank chief economic adviser Randy Shumway.
We are still right at about 110, which suggests that in Utah that the economy is humming on all cylinders.
–Randy Shumway, Zions Bank chief economic adviser
A index score above 110 signifies that Utah is rising above economic recovery into prosperity, with the current index indicating that the local economy is still robust.
“We are still right at about 110, which suggests that in Utah that the economy is humming on all cylinders,” he said.
Shumway attributed much of the consumer optimism heading into 2015 to lower gasoline prices that have been influenced by steep declines in global crude oil prices in recent months.
Because of fracking technology, along with increased access to domestic oil reserves, the United States is expected to produce enough energy to satisfy about 84 percent of U.S. demand in 2104, he said.
Increased domestic energy production combined with decreasing oil demand in Europe and China, as well as rising Middle East petroleum production, have driven crude oil prices — and consequently gas prices — way down, Shumway said.
Arab oil producers are expected maintain their current production levels throughout much of next year in an effort to maintain their worldwide market share, meaning gasoline prices will probably remain relatively low, he said.
Shumway warned, however, that fuel prices typically begin to rise heading into Memorial Day, where they “plateau” and remain at those levels through Labor Day.
“It’s expected that the average price of gasoline throughout the entire year (of 2015) will be about $2.60 a gallon,” he said. “What that does is give additional disposable income to consumers, which oftentimes they will spend on other items.”
As consumer spending increases, so does productions of goods and services, which in turn has a positive impact on the economy, Shumway explained.
He also noted that the average economic growth internationally is forecast to be in the 4 percent range, which will help stimulate the U.S. economy as well as the Utah economy.
Meanwhile, consumer sentiment regarding the current state of the Utah economy was somewhat mixed, according to the report.
The Present Situation Index — a measure of how consumers feel about current economic conditions — decreased 0.5 points to 117.4 this month compared with the national Present Situation Index, which climbed 4.9 points to 98.6.
The Expectations Index — a reflection of consumers' feelings about economic circumstances six months from now — dropped 12.2 points in December to 103.9. In comparison, the national Expectations Index decreased slightly — 0.8 points — to close at 88.5 for the month.
Data for the index are compiled based on a monthly survey conducted by The Cicero Group at a confidence interval of plus or minus 4.38 percent at a 95 percent level of confidence using a representative sample of 500 Utah households. The monthly data are compared with both Utah and U.S. data from previous months to identify key consumer sentiment trends throughout the state.
