MassDevelopment.com: Press Room: MassDevelopment / Mass Insight Corporation Announce Six Point Jump in Consumer Confidence, Improved Optimism About Business Climate and Future of Economy

MassDevelopment / Mass Insight Corporation Announce Six Point Jump in Consumer Confidence, Improved Optimism About Business Climate and Future of Economy
February 9, 2005

Contacts:
Mary-Beth Sorgi, Mass Insight Corporation, 617-722-4160 x14
Tracy Lawrence, MassDevelopment, 617-330-2011

Consumers in Massachusetts are feeling more confident at the start of 2005, due to a slightly improved view of current conditions in business climate and employment, and increased optimism about the future direction of the economy, according to the Mass Insight/MassDevelopment Quarterly Consumer Confidence Index released today. Conducted at the end of January, the survey showed consumer confidence up six points, compared to a seven point drop the previous quarter.

"It's always good to start the new year with an increase in consumer confidence," said Robert L. Culver, MassDevelopment president/CEO. "I am particularly pleased that Massachusetts residents are demonstrating more confidence in the state's economic future; hopefully Bay State citizens can build on this growing optimism to fuel our continued recovery."

While the six point jump is a significant increase, it is worth noting that over the last year, consumer confidence has been fluctuating within a relatively narrow band slightly below the "normal" figure of 100.

Consumer attitudes reflect improvement in real economic conditions. The employment picture is more positive with unemployment claims down slightly in Massachusetts. Economists anticipate that 2005 will show continued growth, although not at an historically high rate.

"Overall, it seems that consumers are feeling better about the state of the economy," said William Guenther, president, Mass Insight Corporation. "People seem to feel that Massachusetts is on a positive course. The news is that economists project continued moderate growth in 2005."

The Current and Leading Economic Indices for Massachusetts also indicate that the economy is in a slow recovery, according to Alan Clayton-Matthews, who compiles the index for Massachusetts Benchmarks, the quarterly economic journal published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston.

The Leading Economic Index is a forecast of the growth in the current index over the next six months, expressed at an annual rate. The Current Index for Massachusetts for December was 129.5, up 3.3% from November (at annual rates) and up 2.4% from last year. The Leading Index, which forecasts growth in the Current Index over the next six months, is at 2.7%. This number predicts that the pace of economic growth that Massachusetts has been experiencing is likely to continue through the spring of next year.

The Mass Insight/Mass Development Consumer Confidence Index is based on a telephone survey of 500 local consumers. The survey is conducted by Opinion Dynamics Corporation of Cambridge. This quarter's interviews were carried out between January 28-31, 2005.

MassDevelopment, the state's finance and economic development authority, partners with businesses and local officials to stimulate growth across the Commonwealth. In fiscal year 2004, the agency arranged financing for or managed 201 projects statewide totaling more than $1.25 billion. These projects supported the creation of more than 5,500 jobs and 2,445 housing starts.

Mass Insight Corporation is a non-partisan public policy research and economic development consulting firm working with industry associations, corporations, and state and local government to ensure Massachusetts' global competitiveness and sustained economic growth.

For additional information on the index, go to www.massinsight.com.