2005 Report on Consumer Intentions
A majority of New Jersey residents (52%) say they are likely to be financially better off a year from now and only 19% say they think they’ll be worse off next year according to the annual consumer poll by Fairleigh Dickinson University’s PublicMind and the Silberman College of Business. Similarly, a majority (52%) believe that business conditions will improve in the Garden State while only 21% think business conditions will deteriorate over the next year.
“The optimism expressed by consumers last January was consistent with their behavior during the past 12 months,” according to James Almeida, professor of entrepreneurial studies at the Silberman College of Business that sponsored the study. “Consumers’ outlook for 2005 again reflects a strong confidence in their financial position and business conditions in the state,” added Almeida.
Last year (2004), 55% of respondents expressed bullish sentiments, slightly more than this year’s 52%. Likewise, this year, only 19% of respondents indicate that they are likely to experience a deterioration in their finances a year from now, a slight increase from last year when 15% of respondents expressed that kind of pessimism.
“New Jersey consumers continue to be confident,” said Almeida. “However, their confidence is tempered by some anxiety about the political condition of the country.” Two of three of those who say they’ll be worse off financially next year say the country is “off on the wrong track and even a plurality of those who say they’ll be better off financially next year agree that the country is “off on the wrong track.”
Among other findings of the study,
The annual consumer study by Silberman College also produces two composite indicators of economic activity. This year’s composite number of Consumer Intentions (prospective)—what consumers think they will do—is 45, an improvement from 42 last year. This year’s composite number of past performance (retrospective)—what consumers actually did—is 43 and matches almost exactly what consumers last year said they would do (42), It is also an improvement from the previous year’s report of 41. “The difference in the two numbers, prospective and retrospective, reflects an improving trend in consumers’ sentiment over the past three years, and suggests a trend of strengthening confidence,” said Almeida.
Consumer optimism appears to transcend racial lines but is stronger among males as well as those in the 18–54 age group, and those residing in the northwestern, central and urban regions of the state. Additionally, respondents who identify themselves as Republicans are more likely than other partisans to be sanguine about their future prospects (59%), although one in two Democrats are also confident.
While New Jerseyans are confident about their economic outlook, things don’t always pan out for them or appear to have done so. Last January, 55% said they thought their financial condition would improve but in this year’s study only 37% reported that it did improve. Conversely, while only 15% expected their condition to deteriorate, almost twice that number reported that it did. “Nevertheless,” said Almeida, “the results suggest that consumers are not only feeling more confident about their personal finances, but are experiencing an improvement in their finances.
That optimism extends from personal finances to the general business climate. A majority of Garden Staters (52%) think that business conditions will improve in the state and only 21% believe that business conditions will deteriorate. This confidence is typical across most demographic categories but is particularly strong among non-caucasian segments, and younger residents, and those in the northwestern, central and urban regions of the state. “This confidence reflects the improving labor market,” said Almeida who also noted that only one in three individuals report that they personally know somebody who lost a job in the past year compared to the 2004 study in which almost every other respondent knew somebody who had lost a job.
The survey of 884 randomly selected adults throughout New Jersey who participate in their household’s financial decisions was conducted from January 3 through January 9 and has a margin of error of +/- 3.3% percentage points. The project was underwritten by the Silberman College of Business.
Almeida, survey analyst:
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