Arkansans' opinions about the economy have fallen since March, bringing a key consumer sentiment measure more in line with national attitudes, according to a new report sponsored by Arvest Bank.
The Fall 2015 Arvest Consumer Sentiment Survey put the state's consumer sentiment index at 77.8 in September, down from 79.1 in March. Despite the six-month decline, the September number remains higher than previous surveys in October 2014 (68.1) and June 2014 (67.4).
The survey is based on methodology used by the University of Michigan's national Index of Consumer Sentiment. It's based on five questions that evaluate consumer perceptions of their current and future finances and business conditions; plans to purchase major household items; level of debt; savings; and demographic information.
More: Get an executive summary of the survey (PDF).
The September number brings Arkansas closer in line with the national consumer sentiment index of 87.2. But researchers point out that the 9.4-point difference between the state and national indexes is half of what is was in October last year.
Kathy Deck, director of the Center for Business and Economic Research at Sam M. Walton School of Business at the University of Arkansas at Fayetteville, is the study's lead researcher. She said the survey's September results are at odds with improving statewide economic conditions.
"Arkansas remain far more negative in their perceptions of economic conditions than their regional and national counterparts," Deck said in a news release. "Moreover, the decline in sentiment since the March reading was broad-based, occurring for both families with incomes above and below $75,000. In short, good local macroeconomic news does not seem to be positively affecting individual perceptions about their own situations."
Deck is expected to discuss the results of the survey at an Arvest economic forum Tuesday morning in North Little Rock. Marc Fusaro, an associate professor of economics at Arkansas Tech University in Russellville, is also scheduled to discuss results from ATU's business index.
Arvest conducts the consumer sentiment survey in three states where it has a banking presence: Arkansas, Missouri and Oklahoma. Deck noted that Arkansas was the only state among the three whose sentiment index dropped. Missouri and Oklahoma both reported increases: from 85.2 to 85.8 in Missouri and 84.8 to 85.0 in Oklahoma.
John Womack, president of Arvest Bank in Little Rock, said that despite the six-month decline, sentiment remains higher than last year, and that's reflected in the banking activity he's observed.
"We’ve seen an increase in mortgage loans used to purchase homes, we’re seeing increased activity in new credit card accounts and we’ve had a good year for consumer loans," Womack said. "Overall I would say that while this report shows a slight decline in consumer confidence from March, it’s still a vast improvement from the confidence we saw last year."
CBER researchers work with the University of Oklahoma’s Public Opinion Learning Laboratory to conduct 1,200 random phone interviews for the survey. The CBER, Missouri State University and Oklahoma City University provide state data analysis. The survey is conducted twice a year, with the next survey expected to conclude in March.