Floridians less confident about the economy

By Palm Beach Business.com

DELRAY BEACH — Combine the GM bankruptcy with the release of a tight state budget, and higher unemployment and you have a formula for a dip in consumer confidence.

And that’s exactly what happened. Statewide consumer confidence dropped 3 points in June to a reading of 68, according to the University of Florida.

“The economic landscape in Florida remains mixed,” said Chris McCarty, director of the UF survey. On the negative side is high unemployment, and continued foreclosures. Gas prices have increased dramatically over the past month. The businesses that Florida typically relies on, including tourism and construction from population growth are anemic. Even Florida agriculture, a long time employer for the state, is threatened by citrus greening and the very real possibility of a permanent shift away from the production of oranges and grapefruit.

“On the positive side, the Florida Association of Realtors report for May once again showed signs that the median price of existing homes in Florida is stabilizing.”

Meanwhile, in a separate report, the Conference Board’s Consumer Confidence Index, which has been rising since February, retreated to 49.3 in June from 54.8 in May. A less favorable view of current business conditions and the jobs market fueled the decline.

“The decline in the present situation index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak,” said Lynn Franco, director of the Conference Board’s consumer research center.  “Looking ahead, expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth."

Survey respondents claiming business conditions are "good" decreased to 8.0 percent from 8.8 percent, while those saying conditions are "bad" increased to 45.6 percent from 44.5 percent.

Consumers’ assessment of the labor market was also less favorable. Those stating jobs are "hard to get" increased to 44.8 percent from 43.9 percent. Those saying jobs are "plentiful" decreased to 4.5 percent from 5.8 percent.

Consumers' short-term outlook also waned in June. Consumers anticipating an improvement in business conditions over the next six months decreased to 21.2 percent from 22.5 percent, while those expecting conditions will worsen increased to 20.2 percent from 18.0 percent in May.

The job outlook was also more pessimistic. Those anticipating more jobs in the months ahead decreased to 17.4 percent from 19.3 percent, while those anticipating fewer jobs increased to 27.3 percent from 25.6 percent.

The proportion of consumers expecting an increase in their incomes declined to 9.8 percent from 10.8 percent.

palm beach business.com
JUNE 30, 2009 click to go home
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