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Massachusetts Consumer Confidence Index Jumps Eight Points
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August 19, 2004 Contacts: Gordon Carr, Mass Insight Corporation, 617-722-4160 ext. 18 Janet Hookailo, 617-330-2018 or jhookailo@massdevelopment.com Mass Insight/MassDevelopment Quarterly Index is Highest in Eighteen Months Massachusetts consumers are feeling considerably more confident about the economy, according to the Mass Insight/MassDevelopment Quarterly Consumer Confidence Index released today. Conducted at the beginning of August, the survey showed consumer confidence up by a solid eight points to 97, compared to a slight decline the previous quarter. "Consumers in Massachusetts are definitely more confident about the state of the economy right now," said MassDevelopment President and CEO Robert L. Culver. "This is the highest overall rating we've seen in a year and a half." In January, 2003, the index stood at 63. Consumer attitudes are considered to be more positive than negative when the index tops 100. "People are also becoming more positive about their prospects for the future," said Mass Insight Corporation President William Guenther. "They continue to be somewhat cautious, but they've begun to come around. Consumers are seeing significantly greater confidence in the current situation." While expectations for the future also rose, an unusually large percentage of consumers are uncertain about future business and job prospects. The group who answered "not sure" to the question of future business conditions doubled from the last quarter to 16%. In addition, when asked about job availability six months from now, about two-thirds said there would be the same number or more jobs, and those answering "not sure" rose from 10% to 20%. "Economic, political, and global uncertainty may be creeping into the minds of some consumers, causing them to view the future with more caution as the presidential race heats up and the outcome remains unclear," said Guenther. Breaking the index into two categories - current conditions and future expectations - shows a noteworthy split in attitude. The rating for current conditions was up 13 points, while that for future expectations rose six points. To be considered statistically significant, results must change by five points. "The Index continues to lag behind national and regional ratings with Conference Board figures breaking 100 for the first time since April 2002. Massachusetts lost jobs at two to three times the national rate in this downturn," said Culver. "Many of those jobs were in high tech and high quality manufacturing. So our road to recovery will be longer." The Mass Insight/MassDevelopment survey results mirror the recently issued Associated Industries of Massachusetts monthly Business Confidence Index for July, which rose 3.7 points to 63.3, its highest level in almost four years. The Mass Insight/MassDevelopment Consumer Confidence Index is based on a telephone survey of 500 local consumers. The survey is conducted by Opinion Dynamics Corporation. This quarter's interviews were carried out between July 31 and August 2, 2004. MassDevelopment is the state's economic development authority, working with businesses, financial institutions and local officials to provide the financial tools and real estate expertise required to stimulate economic growth across the state. In fiscal year 2004, MassDevelopment financed $896 million in projects statewide, assisting in the creation of more than 5,300 jobs and 3,900 housing units. 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, visit www.massinsight.com.
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