SALT LAKE CITY, Utah – Utah consumer attitudes soared to their highest levels since October 2012 as the May Zions Bank Consumer Attitude Index (CAI) increased 10.4 points to 86.9. This month’s national Consumer Confidence Index® (CCI) also saw a significant jump, rising 7.2 points to 76.2.
A decreasing unemployment rate, record highs in the stock market, and increased confidence in the housing market all contributed to the marked increase in this month’s CAI. Continued momentum in the housing and labor markets now appears to be outweighing the uncertainty surrounding ongoing political turmoil in Washington, as well as concerns fostered by the rise in gasoline prices earlier this year.
Last month, 52 percent of Utahns thought it was unlikely the U.S. economy would improve over the next 12 months. In May, just 39 percent think improvement is unlikely, the lowest it has been during 2013.
Utah’s unemployment rate has fallen for a third month in a row, now sitting at 4.7 percent, well below the US unemployment rate at 7.5 percent. Utah consumer attitudes reflect this improvement: 21 percent think jobs in their area are plentiful – the highest proportion of residents expressing this sentiment since the inception of the Zions Bank CAI in January 2011. Moreover, consumers are feeling more secure in their current jobs. Seventy-four percent of Utahns think it is unlikely they will lose their job during the next two years, and only 10 percent anticipate their household income decreasing over the next six months.
The housing market continues to be another key area of strength in the Utah economy. Sixty-two percent of Utahns think their home price will increase over the next 12 months, up from 43 percent at the end of 2012. Consumer attitudes are also improving due to increasing home values, as well as record highs in the stock markets. Thirty-four percent of consumers now expect $1,000 invested in their 401K to be worth more than $1,000 one year from now, compared to only 21 percent at the end of 2012. The markets have additional impact: an increase in the total value of consumer assets generally stimulates consumer spending, and consumer spending is crucial to a growing economy since it accounts for approximately 71 percent of the nation’s gross domestic product.
Consumers see improvement in the economy enduring in the coming months. The Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — increased 10.2 points in May to 90.1. For reference, a reading above 90 is historically consistent with a healthy economy. The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — also increased in May, up 10.6 points to 82.2. Since November 2012, Utahns have maintained substantially more confidence than have their counterparts throughout country. This month, the Zions Bank CAI Present Situation Index sits 15.5 points ahead of the CCI Present Situation Index, and the CAI Expectations Index is 7.7 points ahead of its national equivalent.
“Job growth has been steady, stock markets are reaching new highs, and consumers are seeing their home values increase almost every month,” said Scott Anderson, President and CEO of Zions Bank. “Consumer attitudes are finally catching up with the positive signs we have been seeing across the state for quite some time.”
<strong>Northern Utah Economic Landscape: Cache and Box Elder County</strong>
The unemployment rate for Cache County decreased 0.4 percentage points to 3.9 percent in March according to the U.S. Bureau of Labor Statistics. Cache County’s unemployment rate continues to remain well below the state average of 4.9 percent and the national average of 7.6 percent measured in the same period. The most recent report from RealtyTrac® shows that approximately seven in every 10,000 homes were in foreclosure in Cache County in April, an increase from five in every 10,000 one month prior.
The unemployment rate in Box Elder County decreased significantly by 1.0 percentage points to 5.7 percent in March, according to the Bureau of Labor Statistics. In the same report by RealtyTrac®, approximately 16 in every 10,000 homes in Box Elder County were in foreclosure in April, an increase from 11 in every 10,000 one month prior.
Utah State University is making substantial improvements and additions to its sports facilities in 2013, driving economic development in Cache County. On May 9, University Vice President Scott Barnes announced the construction of the new $9.5 million Wayne Estes Center — a basketball practice facility and volleyball competition venue. Funded entirely by private donations, the 32,000 square-foot facility will be built by Utah’s Okland Construction and designed by VCBO Architecture. The new facility’s construction will boost Cache County’s economy through ancillary benefits related to such a significant project, as workers seek lodging and entertainment in the area. The facility will also contain seating for 1,400 fans, and promote
Utah State’s ability to recruit top athletic prospects. The new building is expected to be completed in April 2014.
Zions Bank provides the CAI as a free resource to the communities of Utah. The monthly CAI summary reports are released at a monthly press conference, coinciding with The Conference Board’s national CCI release date. The reports are available online at www.zionsbank.com/cai. Analysis and data collection for the CAI are done by The Cicero Group/Dan Jones & Associates, a premier market research firm based in Salt Lake City. The June CAI will be released during a press conference at 10:30 a.m. on June 25, 2013.