Arkansas consumers expect to make large purchases now because they're seeing low unemployment rates, lower interest rates and the possibility of inflation looming on the horizon, according to the Spring 2016 Arvest Consumer Sentiment Survey released Tuesday.
The final piece of the survey, conducted in March and sponsored by Arvest Bank, focuses on consumer attitudes concerning spending, saving and debt.
From September to March, Arkansas consumers' household savings rate increased from 13.9 percent to 16.4 percent, and the percentage of those planning to increase their savings rate rose from 14 percent to 21 percent, the survey said.
But consumers also see the next six months as a time to make planned purchases before prices start going up, according to Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas and lead economist for the survey.
"With gas prices and interest rates remaining low and incomes rising, Arkansans were most positive about the idea that buying conditions are at an attractive level right now," Deck said. "With such low unemployment rates, there may be inflationary pressures building in the state's economy, so large purchases are particularly appealing right now."
In Arkansas, 30 percent said they plan to make a major household purchase — items such as furniture, televisions and refrigerators — in the next six months, up from the 24 percent reported in September.
Seven percent of respondents said they'd seek auto loans and credit cards; 6 percent would seek mortgage loans; and 4 percent said they'd seek student loans.
Jim Cargill, president and sales manager of Arvest Bank in Little Rock, said the bank is seeing evidence that supports the findings, including increases in mortgage activity — new purchases and refinancing.
Arkansans' consumer debt continued to remain below that of their neighbors in Missouri and Oklahoma in all categories. Arkansas respondents reported that 30 percent had mortgages in March, 2 percent had home equity loans, 29 percent had auto loans, 40 percent had credit card balances and 18 percent had student loans. Twenty-three percent reported having no outstanding debt.
The Arvest Consumer Sentiment Survey is conducted by the CBER, which also evaluates the Arkansas data, with the University of Oklahoma’s Public Opinion Learning Laboratory conducting 1,200 random phone and online surveys. The survey is conducted twice a year, with the next results in October.