2008 Report on New Jersey Consumer Intentions
New Jerseyans’ Expectations Sour for New Year
Full report in PDF format
According to the annual New Jersey consumer survey by Fairleigh Dickinson University’s Silberman College of Business, New Jerseyans’ confidence in their short-term financial future continues to erode. Only 27% of New Jerseyans say they are better off now than a year ago, while 41% say they are worse off. This is significantly changed from a year ago when 30% said they were better off and 35% said they were worse off, and from two years ago when New Jerseyans split evenly on the question, 35%-35%.
New Jerseyans expectations of the coming year are also down. This year 37% percent expect to be better off 12 months from now, down from 42% last year. Meanwhile, 33% expect to be worse off, up from 27% a year ago. Another 19% expect no change and 12% are uncertain.
“Considering all the bad financial news of the past year, it’s hardly a surprise that consumers are a bit somber these days,” according to James G. Hutton, professor of marketing in the Silberman College of Business and author of The Feel-Good Society: How the "Customer" Metaphor Is Undermining American Education, Religion, Media and Healthcare. “But these are the worst numbers we have seen in the past five years.”
Only 18% of respondents say that business conditions in New Jersey improved over the past year. That is down from 24% a year ago and 33% two years ago . Meanwhile, a majority (56%) say that the state’s business conditions are worse than they were 12 months ago, significantly up from 41% who last year said business conditions had deteriorated.
In looking to the next 12 months, only 28% say they expect business conditions to improve (compared to 37% who were optimistic last year), while 42% expect conditions to decline further (compared to just 30% last year).
People’s expectations about home prices have also declined. The survey found that only 38% of New Jerseyans think home prices in their area will increase in 2008. A year ago, 46% expected home prices to rise; two years ago that number was 55%; and three years ago the number was 81%.
Among other key findings of the study:
The annual consumer study by Silberman College also produces two composite indicators of economic activity, both of which declined from last year, indicating a decline in consumer optimism. This year’s composite number of Consumer Intentions — what consumers think they will do — is 37, down from 40 a year ago and from 45 three years ago. This year’s composite number of past performance — what consumers actually did — is 34, down from their 38 mark of a year ago, and less than the 40 that consumers predicted.
“The sub-prime mortgage mess and declining home sales and prices have undoubtedly had an impact on consumer behavior and consumer confidence over the past year,” added Hutton. “More recently, it appears that an increase in the unemployment rate, a decline in stock prices and predictions of a recession by some economists have further eroded confidence.”
Despite the rather gloomy overall outlook for consumer confidence, the study does indicate a few bright spots:
The telephone survey of 620 randomly selected adults throughout New Jersey who participate in their household’s financial decisions was sponsored by Fairleigh Dickinson University’s Silberman College of Business and conducted by PublicMind from January 2 through January 6 and has a margin of error of +/- 4% percentage points.
Contacts: Dr. James G. Hutton
973-256-1680 (h) or 201-692-7241 (w)
For more information, please call (973) 443-8661.