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Consumer confidence drops in Florida

By Palm Beach Business.com

DELRAY BEACH — Consumer confidence nationally moved to its highest point in four-and-a-half years but dropped fairly sharply in Florida, according to separate reports released Tuesday.

The Conference Board’s Consumer Confidence Index moved to 73.7 in November from  73.1 a month earlier. Meanwhile, the University of Florida’s consumer confidence index for the Sunshine State dropped to 76 in November from October’s revised reading of 80. Declining perceptions of the current economy and expectations both short and long term caused the drop.

The reports are key for retailers, because they indicate the willingness to spend during the holiday shopping season, which began last week.

“We expected a decline in consumer confidence for two reasons,” said UF Survey Director Chris McCarty said. “The main reason for the decline was the outcome of the elections.  Florida was the most divided state in the country, with  President Obama winning by 73,309 votes.  No matter who won, half of the state was not going to be happy with the outcome.”

McCarty said the split is evident in survey results. Confidence among Democrats in Florida rose from 99 in October to 103 in November, while confidence among Republicans fell from 62 in October to 50. 

Increased news coverage of the so-called fiscal cliff also factored into the decline, McCarty said.

Aside from the election, economic indicators in Florida remain relatively positive.  Unemployment declined in October to its lowest point since 2008, housing prices are up year-over-year, and gasoline prices have continued to drop since Labor Day.

All of this indicates that consumers are likely going to spend more than they did a year ago. The question is by how much.

 “The holiday season got off to an earlier start this year, but early sales figures were mixed,” said McCarty.   “Thanksgiving sales were relatively strong, but clearly robbed Black Friday sales.  While consumer confidence is historically low, it is still relatively high post-recession. We expect holiday sales growth to be positive, but not as high as the 4.1 percent predicted by the National Retail Federation.

“More likely is an increase of 2 percent as predicted by the Ball State Center for Economic and Business Research.”