Consumer confidence tracked in April in the nine regions of America, as defined by the U.S. Census Bureau, ranked from most optimistic to least.
This story first appeared in the May 22, 2003 issue of WWD. Subscribe Today.
According to the Conference Board, consumer confidence levels peaked in 2000 and have been eroding gradually ever since. Unemployment hovers around 6.5 percent, compared with 2000, when it was only 3.9 percent. But all is not bleak. Optimism rebounded in April because of postwar euphoria and there have been signals that business and labor conditions are improving. In April, 42.2 percent of those surveyed said in the next six months, they plan to take a vacation and 28.5 percent indicated they will buy a major appliance, a sign that purse strings may be loosening.
Projection in six months: 92.2
The area, which consists of Delaware, the District of Columbia, Florida, Georgia, Maryland, North and South Carolina, Virginia and West Virginia, hasn’t suffered as much as the Midwest, but is probably not as far along in its recovery as the Mountain and East South Central states, according to Ken Goldstein, an economist with the Conference Board. A big region for home building, the South Atlantic states have benefited from the strong demand for new homes over the last six years.
WEST SOUTH CENTRAL
Projection in six months: 95.1
Arkansas, Louisiana, Oklahoma and Texas are considered the oil patch states, although they’re less dependent on energy than they used to be. The West South Central region is dominated by Texas, which in turn is heavily impacted by Mexico. The south of the border neighbor had been moving toward a recovery but slipped back somewhat. There’s also the Wal-Mart boom in Bentonville, Ark. All in all, folks in the region are optimistic about the future.
Projection in six months: 104.9
Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming are close to making the turn, according to economist Goldstein, who said, “There’s grounded optimism in the Rocky Mountain states.” Several factors bode well for the region, including the relatively healthy Canadian economy and the continued influx of California transplants. The region is also home to a large contingent of high-tech firms, a sector said to be on the comeback trail.
EAST SOUTH CENTRAL
Projection in six months: 80.7
Alabama, Kentucky, Mississippi and Tennessee are part of the old cotton belt and the heart of Bible country. The contraction of the textile industry has hurt the area, but the region is not dependent on one industry. It’s benefited from assembly lines brought by car manufacturers such as Nissan, which built a $1.4 billion plant in Mississippi. In Alabama, four auto plants are under construction, including a Hyundai facility in Montgomery.
EAST NORTH CENTRAL
Projection in six months: 80.7
Rust belt states Illinois, Indiana, Michigan, Ohio and Wisconsin are impacted by the manufacturing industry, which is still in a recession and dairy farmers, who’ve been hurt by low milk prices. “When this area starts coming back, you’ll know the economy has finally made the turn,” said Goldstein, calling East North Central “a bellwether region. If it’s still down in the dumps then the national economy is looking for a recovery.”
WEST NORTH CENTRAL
Projection in six months: 69.1
The region, which consists of Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota is home to agriculture, small machinery and manufacturing. As one of the smaller regions in the country, it gets buffeted by the economic winds from its neighbors to the north, east and west. The good news is that Canada is doing well. The bad news is that the East North Central region is still waiting for a recovery.
Projection in six months: 75.6
The economy of mid-Atlantic states New Jersey, New York and Pennsylvania is heavily driven by the financial markets in Manhattan, which remain on shaky ground. While the Dow Jones industrial has risen to the 8,500 range, it’s still nowhere near it’s 1999 peak of over 10,000. Other sectors negatively impacted include research, exports, broadcasting and advertising. “This will be one of the last regions over the wall,” said Goldstein, adding, “There’s still a lot of wariness in this part of the country.”
Projection in six months: 86.3
Pacific states Alaska, California, Hawaii, Oregon and Washington are suffering from a drop in tourism, fiscal crises and the burst of the dot-com bubble, although there are indications that Silicon Valley is starting to see some recovery. Other industries the region counts on are trailing, such as apparel, retail and film. Even the success of “The Matrix: Reloaded” hasn’t sufficiently pumped up the volume in Hollywood.
Projection in six months: 76.7
The fate of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont often closely follows that of the mid-Atlantic states. The big financial and insurance firms in the region have suffered during this prolonged bear market. Still, according to Goldstein, New England never saw a big drop-off in consumer spending, which indicates that there’s more volatility in attitudes than spending patterns.
U.S. AVERAGE 1985 = 100
The consumer confidence survey is based on the responses to five questions about current and future business and employment conditions. A formula is used to yield a relative value for each question. The average relative value for the calendar year 1985, which equals 100, is then used as a benchmark to find the index value for that question. The indexes for each question are then averaged together.
SOURCES: THE CONFERENCE BOARD AND NFO WORLDGROUP