Floridians’ consumer confidence declined marginally in February, dropping to 76, from the previous month, according to a just-released University of Florida Survey.
“The pattern of consumer confidence in Florida over the last three months is exactly the same as it was a year ago,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “From December 2010 to February 2011, the overall level of confidence went from 70 to 77, then 76, the same as this year.”
McCarty said, the true test of whether confidence is sustained will come in March. Last year, it dropped four points and continued to decline steadily until August as Americans reacted pessimistically to events at home and abroad.
Currently, various economic indicators show why Floridians remain modestly optimistic. These relate to recent stock market activity which reached post-recession highs, with the Dow Jones industrial reaching over 13,000 for the first time in four years. This rise, McCarty said, tops a “psychological barrier that if passed could lead to increased investment.”
Florida’s unemployment rate in December dropped to 9.9 percent. Most of the new jobs were in trade, transportation and utilities. Home prices, which edged up to an average $134,300 in December, have stabilized since, though they are expected to decline again later in the year if the Florida Legislature approves legislation to speed up foreclosures on 368,000 properties, McCarty said.
Three of the five categories measured by the survey revealed a drop in confidence among respondents in February. But respondents were upbeat in their assessment of whether now is a good time to buy big-ticket items such as a computer or washing machine. One category showed no change – confidence in the U.S. economy a year from now remains at 75.
A recent University of Michigan study showed consumer sentiment across the nation, like that in Florida, also remained relatively unchanged, rising slightly to 75.3 from a January mark of 75.
According to McCarty, Floridians’ economic outlook is clouded by several issues, including the presidential election, the possible expiration of the Bush tax cuts in 2013, a fresh round of budget cuts mandated by Congress and possible fallout from steps taken to avert default in countries such as Italy, Spain and Greece
“The sustained level of consumer confidence is welcome news, but it will be interesting to see how consumers react going forward,” McCarty said. “Consumer confidence in March should give us a good indication as to whether we will trend down or hold onto these gains.”
The UF survey was conducted between Feb. 12 and Feb. 23, and reflects the responses of 403 people statewide.
