O.C. Consumers More Confident Than Ever

With Orange County’s economy humming along, residents are more optimistic than ever that the good times will continue, according to a survey released Monday.

The Consumer Confidence Index in Orange County, which measures residents’ attitudes about the national economy and their own financial situation, surged to the highest level since UC Irvine began tracking consumer attitudes in 1986.

With the county’s job growth up, a strong stock market beefing up portfolios, inflation holding steady and housing values appreciating, “it’s hard to imagine how things could look brighter for Orange County consumers than they do now,” said UCI professor Mark Baldassare, a co-director of the survey.

Another factor accounting for the exuberance is the improved Asian economic situation, said UCI research associate Cheryl Katz, who worked with Baldassare on the study.

“The fear we saw [last year] about the Asia crisis has gone away,” she said. “These appear to be really good times in Orange County, and people seem to be riding high on the surging economy.”

But Baldassare sounded one note of caution about the high degree of optimism among area residents. Investors have grown accustomed to unprecedented stock gains and might “panic” when a correction takes place.

“I think people have lost sight that the economy has natural ups and downs,” he said.

The overall county index moved six points to a record 111, surpassing a similar measurement of national sentiment for the fourth year in a row. Earlier in the decade, when Orange County was in the throes of bankruptcy and an economic slump, residents were more pessimistic than the nation.

The latest survey found, however, that more than 70% of Orange County residents expect the U.S. economy to perform well in the coming year--up from 59% last year. And a record 58% expect the national economy to remain strong during the next five years.

Ready to Spend

The bullish mood was reflected Monday at Metro Pointe Retail Center in Costa Mesa, which was filled with shoppers despite a gloomy day.

Fountain Valley resident Joseph Casillas, 67, left the big-box retailer Best Buy carrying a new vacuum cleaner, even though his old one works just fine.

“I’m getting interest from my investments and feel they are coming around,” said Casillas, a retired aerospace engineer. “Everything is going good.”

Linda Bain, a Laguna Beach resident who runs a child-care business, left Nordstrom Rack with $200 less in her pocket.

“You see time and again in the newspaper that the United States is doing pretty good,” she said. “I’m definitely spending more money.”

Economist Esmael Adibi attributes the upbeat mood to the so-called wealth effect created by the booming real estate values and the surge in stock prices, which have generated an estimated $90 billion for county residents over the last three years.

“We’re all enjoying the stock market and home appreciation of the past few years and are all feeling wealthy,” said Adibi, director of Chapman University’s Anderson Center for Economic Research.

The rosy outlook should continue to loosen local purse strings, as 72% of those surveyed said that now is a good time to buy such big-ticket items as furniture, refrigerators and stoves.

Latinos Confident

Confidence among Orange County’s Latinos is extremely high, according to the survey, with 61% saying they expect to be better off next year, compared with 51% of all Orange County residents. And nearly three-quarters of Latinos expect the U.S. to remain strong next year.

“The Hispanic community as a whole is doing much better economically,” said Ralph Puga, president of the Hispanic Chamber of Commerce of Orange County. “Right now, Latinos, especially Latinas, are starting more new businesses than any other minority group in Orange County. We’re doing well.”

The 1,000 adults surveyed earlier this month in the random poll were more optimistic than local economists and some business executives.

Indeed, a separate UCI survey released earlier this month found top executives in the county were not as bullish as in recent years.

“Businesspeople in Orange County are a little more cautious than the general public,” said Dennis Aigner, the UCI economist who conducted the executive study. “They’re basically saying the great expansion has taken place.”

In June, Chapman economists cautioned that the booming U.S. economy would slow in 2000.

The consumer confidence survey is the first part of UCI’s annual Orange County survey. Results of the full poll, which includes residents’ views on housing, quality of life, education and other issues, are scheduled to be released in November.

Correspondent Marissa Espino contributed to this report.

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County Optimism Hits High Point

Fully 71% of the county’s residents believe good economic times will continue next year, according to a recent UC Irvine survey. Nearly 60% of those polled felt it would continue over the next five years.

CONSUMER CONFIDENCE INDEX

(Based on a five-question survey)

1993

O.C.: 73

U.S.: 75

1999

O.C.: 111

U.S.: 105

CONFIDENCE IN U.S. ECONOMY

“Looking ahead, will the country have continued good times during the next five years or wil we have periods of widespread unemployment or depression?”

1993: 29% gap

1999: 33% gap

Source: UC Irvine 1999 Orange County Annual survey