Half As Many Confident Consumers This Year Than Last

by Jack Loechner, Feb 19, 2008, 8:15 AM

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Half As Many Confident Consumers This Year Than Last

According to the BIGresearch Consumer Intentions & Actions Survey in February, over 8,000 consumers provided unique insights & identified opportunities in a fragmented and transitory marketplace. On the downside, only one in four (26.2%) are confident/very confident in chances for a strong economy in February, a five year low. A sinking housing market, credit collapse, and record prices at the pump provides the impetus for only half as many consumers holding high hopes for the future than in February 2007.

Consumers Anticipating a Strong Economy
Date	% of Respondents
February 2003	30.8
February 2004	49.3
February 2005	47.7
February 2006	44.5
February 2007	53.2
February 2008	26.2
Source: BIGresearch, February 2008

On the upside, Phil Rist, Vice President of Strategy for BIGresearch, concludes that "Many Americans will be wisely using their rebate checks to save, spend, and pay down debt, so the overall result will be positive for the U.S. economy... some will splurge on big ticket items, many... will use the checks for important day-to-day purchases."

While women will spend a larger percentage of their rebate check than men (42.2% vs. 38.7%), both genders will plan to set aside the same percentage for savings (18.7%) Young adults 18-24 will spend more of their checks (46.2%) than any other age group. And:

• 30.3% contend they'll save the money in their piggy banks
• 25.4% will use it to pay down credit cards, while
• 15.7% say they'll pay down debt (installment loans)
• 14.6% reveal that they'd purchase necessities with their checks, with 22.5% of those earning under $50,000 buying necessities 

And while 39.7% of those aged 18-24 are the most likely group to save their checks, 14.9% of this age bracket is the most likely to use their checks toward paying off student loans. 13.3% will buy apparel, and 11.2% expect to purchase electronics.

While confidence in the economy is plummeting, only two in five contend that they've become more practical in their purchases, down a point from January, and still on the rise from '07.

50.4% of the respondents contend there will be "more" layoffs in the next six months, up from 41.5% in January and the highest reading since March '03 (50.4%). While consumers foresee a dreary outlook for employment, it seems they have the "it's not going to be me. 5.5% fear becoming laid off, up slightly from January's 5.2%.

With pump prices rising to today's average $2.972/gal (source: AAA), driver's budgets are increasingly strained by additional fuel expenditures.  While 40.5% are attempting to cope by simply driving less, 35.3% say pump pressures have led them to reduce dining out and 33.6% decreasing vacation/travel/ 29.8% are spending less on clothing. while 22.4% are delaying a major purchase, such as a car or furniture

Seasonal demand for spring merchandise, such as Easter apparel and lawn & garden supplies, lifts the 90 Day Outlook from January, according to the BIGresearch Diffusion Index, but the current economic outlook is expected to put a damper on spending compared to February 2007.

Consumers aren't as likely to be considering purchasing high-dollar durables in the next six months compared to last month and last year. Purchase intentions are down for computers, furniture, home appliances, housing, jewelry, DVD/VCR, and digital cameras...major home improvements and vacation travel flat from January (though still down from '07), while TV remains flat from last month and rises from last year.

Six month purchase intentions for autos remain stable from last month at 11.8%. Among those planning to buy, 43.5% still plan to buy new, while 16.7% aren't yet sure. The average price auto buyers are planning to spend has lowered from $21,150 in January to $19,830 this month.

For more from BIGresearch, please visit them here.

 

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