Huntington Finds Consumers Optimistic about Economy

Friday, December 12, 2014

COLUMBUS, Ohio -- Most consumers living in traditional manufacturing states in the Midwest say they have moved on from the Great Recession and expect next year will be better economically, the third annual Huntington Bank Midwest Economic Index survey finds.

Results of the survey were released Thursday.

This year’s index found a continuation of the trend in which consumers feel positive about the year ahead. Fully half, 50%, expect the economy to be better than this year’s, compared to 49% a year ago and 45% two years ago.

The optimism of consumers interviewed in Michigan, Ohio, Indiana, West Virginia and western Pennsylvania is illustrated by their plans to spend more on vacations, home improvements and autos in 2015.

Consumer sentiment includes:

• 56% said they are better off financially now than five years ago at the worst of the recession.

• 16% said they definitely will buy a new car in 2015 compared with 6% a year ago.

• Similar to last year, three of four plan to take a vacation away from home in 2015, with 59% saying they will spend at least $2,000 to more than $5,000 for the trip -- an increase over last year.

• Of those taking a vacation in 2015, most said they intend to pay with cash.

• Just less than half, 48% of respondents, have plans to complete home improvements in 2015. This compares to 34% who completed home improvements this year.

“Huntington Bank launched its Midwest Economic Index to gauge consumers’ economic sentiments, tracked through purchasing plans, to cut through national economic noise and capture Midwesterners’ actual opinions,” said George Mokrzan, Huntington director of economics. “The survey confirms the recovery we are seeing in our local markets as unemployment rates, and more recently gas prices, decrease. We anticipate that unemployment rates will continue to fall further in these states through 2015.”

Despite their optimism, consumers continue to be wary of the real estate market. Six percent of respondents hope to sell their residences in 2015. When asked about the risk of selling their home now compared with five years ago, only 35% responded it’s less risky. More than a third said the risk is about the same and 29% perceive greater risk.

“The consumer sentiment on the real estate market is in contrast to our analysis, which indicates that housing prices in the states where surveyed consumers live are generally climbing and relatively stable,” Mokrzan said. “Price gains were particularly strong in Michigan and Ohio. Real estate is one area where consumer sentiments are more conservative than what is really happening in the market place today.”

Methodology
Ebiquity conducted the third Huntington Bank Survey between Oct. 20 and 30, interviewing 2,107 adults in the bank’s Midwest footprint – Ohio, Michigan, western Pennsylvania, Indianapolis and West Virginia. These findings have a margin of error +/-2.1% at a 95% confidence level.

SOURCE: Huntington Bank Midwest Economic Index.

Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email headlines.