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Upstate pessimistic about economy

By Tom Wanamaker

ALBANY — While overall consumer confidence rose slightly in New York state last month, upstate residents continue to exhibit declining confidence in their economic future.

In a survey released Tuesday, the Siena Research Institute, upstaters showed the least amount of future consumer confidence of any region or demographic group, coming in at 46.0, down from 47.2 in April and from 64.5 in May 2007.

“It certainly is a dismal number for upstate,” said Douglas Lonnstrom, professor of statistics and finance at Siena College and founding director of SRI. “The economy in the northeast, outside of New York City, has never recovered from the recession of 1991. From New York to Saratoga, up the Hudson Valley, is the best economy in the state — not great but doing OK. Western New York is absolutely dismal.”

The SRI survey seeks to measure both current and future consumer confidence which, when combined, provides a snapshot of consumers’ overall confidence. The survey’s intent is to evaluate the willingness of people to spend money, rather than their ability to do so. The index is a tool by which to comparing consumer confidence at different points in time. Its base year, for which it is set at 100, is 1966.

Statewide, while overall consumer confidence rose to 55.7 for May, future confidence slid to 52.8 for the month, down slightly from 53.1 in April and well off the 76.6 registered in May 2007. Nationally, future consumer confidence for May was 51.7, down from 53.3 in April and from 77.6 in May 2007.

The housing and automobile markets in the Empire State look grim as across the board, New Yorkers say they will curtail their future spending. Overwhelming majorities of consumers across the state said they had no plans to buy a home (94.7 percent), a car or truck (89.2 percent), computer (84.7 percent), furniture (76.4 percent), or make a major home improvement (77.7 percent). All of these “no” numbers, except for furniture, are between three and six percentage points higher than those recorded last month and in May 2007.

Since January 1999, SRI has published monthly surveys to establish a consumer confidence index number for New York state. This number enables direct comparisons of New Yorkers with the nation as a whole, which is measured by the University of Michigan’s consumer sentiment index.

The survey was conducted during May via random telephone calls to 620 state residents over the age of 18. As consumer confidence is expressed as an index number developed after statistical calculations to a series of questions, “margin of error” does not apply. However buying plans, which are shown as a percentage based on answers to a specific question, do have a margin of error of plus-or-minus 3.9 points.

Complete survey data is available online at: www.siena.edu/sri/may08cci.

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