With the holiday season in full swing, Midstate consumers have a gloomier economic outlook compared with their views earlier this fall, according to the latest three-county survey by MTSU.
Though consumers’ perceptions of the economy improved during 2013, the latest Middle Tennessee Consumer Outlook Index shows the overall index falling sharply to 122 this month from 199 in September.
The results from MTSU’s Office of Consumer Research mirror the national downward trend of consumer confidence reported by the Conference Board, a New York-based private research firm, said Dr. Tim Graeff, director of the Office of Consumer Research in MTSU’s Jones College of Business.
“Local consumers view the current U.S. economy a bit more negatively than they did in September, and local consumers are adopting a more pessimistic view of the future of the economy,” Graeff said.
“A decrease in consumer outlook such as this is definitely not welcome news for local businesses and retailers as we head into the ever-important Christmas and Holiday shopping season.”
Dr. Tim Graeff
For some businesses, sales generated in the last two months of the year can be as much as 40 percent of their total annual sales.
“Whether or not this general negative view of the economy finds its way into local consumers’ shopping plans for this Christmas and holiday season remains to be seen,” Graeff said.
The current poll of 302 randomly selected adult residents of Davidson, Rutherford and Williamson counties was conducted Dec. 4 and 6. The Office of Consumer Research computes the index by adding the percentage of favorable responses to each of a series of questions and subtracting the percentage of negative responses.
The latest dip reverses a trend of gradual increase in the index, which showed a score of 106 in November 2012, 144 in February and 193 in April.
The December 2013 survey showed a number of factors weighing on consumers’ minds as they make shopping and spending plans for the rest of the year. These include:
- Concerns about the stability of the U.S. economy.
- Worries about long-term fixes to solving the U.S. debt problem and extending the debt ceiling.
- Frustrations with the new health care law and concerns about its possible negative effect on the economy.
- Gridlock in Congress.
- Concerns about the future of the job market.
- Continued worries about a slow economic recovery.
Local consumers were also asked about the recent Affordable Care Act, also known as Obamacare, and its possible effect on the overall economy. A majority of local consumers said they expect the ACA to have a negative effect on the overall U.S. economy.