Florida’s consumer confidence fell dramatically in June, largely on account of the ongoing overall economic malaise and the impact of the gulf oil disaster, compared to one year ago, according to a new University of Florida survey.
Consumer confidence fell three points in June to 67, but the biggest decline of all components in the survey was in perceptions of personal finances now. That measure fell nine points to 45. Perceptions of personal finances one year from now fell four points to 75.
“We had expected consumer confidence to decline due to the effects of the oil spill,” said Chris McCarty, survey director of the Bureau of Economic and Business Research. “What we did not expect was the main effect to be in the components measuring perceptions of personal finances both now and in the future.”
The personal finance questions tend to be much less volatile than those looking at national trends and reflect real effects on consumers that tend not to rebound quickly.
“The decline in the personal finance questions suggests that on top of the weak recovery, the oil spill has caused some real economic pain, such as through jobs related to tourism and perceptions of lower property values,” he said. “We don’t expect this decline in perceptions of personal finances to turn around quickly.”
Before the oil disaster, housing sales had been fairly strong and prices for lower-priced homes seemed to have hit a bottom. Sales of new homes however, had fallen dramatically, following the expiration of the tax rebate at end April.
Unemployment in Florida registered its second straight decline of 0.3 percent and is now 11.7 percent. This is still historically high, and many of the declines are likely due to temporary Census hires which will disappear after June, he added.
McCarthy predicts that sales tax revenues, already down from the recession will drop even further as tourist put off trips. He believes that this would inevitably translate into a budget deficit next year, which already promises to be more difficult than 2010.
McCarty predicted recent losses in consumer confidence are unlikely to regain until the leaking oil is stopped and the spill’s short- and long-term effects are known.
