O.C. Consumers’ Confidence at 14-Year High
Signs of an economic slowdown may be mounting, but Orange County residents sure aren’t feeling it.
Consumer confidence in the county rose to the highest level since 1986, according to UC Irvine’s annual survey released Thursday.
The poll, which measures residents’ attitudes about the U.S. economy and their own financial condition, found widespread positive feelings among local consumers, particularly among the most affluent and among Latinos.
And for the fifth year in a row, people in Orange County were more exuberant than their counterparts nationwide.
“People are feeling very good about the economy and their own financial circumstances,” said UCI professor Mark Baldassare, co-director of the survey, taken in early May. “They believe the good times will continue.”
The survey findings suggest consumers in the county will keep spending heartily. Yet signs are emerging that the economy may be shifting to a lower gear. From new-home and car sales to factory orders for raw materials, the latest data indicate that the Federal Reserve’s successive interest rate hikes are starting to cool the sizzling economy.
Even so, Baldassare said, local residents were buoyed by Orange County’s solid job growth, unusually low unemployment rate and modest level of inflation.
Predictably, the survey found that the richest Orange County residents--those with household incomes above $80,000--are the most bullish, with more than six in 10 polled saying they expect to be better off a year from now. By contrast, less than half the respondents with incomes below $36,000 share that optimism, the study said.
“Those on the lower end of the economic ladder feel like they’re missing out,” said UCI research associate Cheryl Katz, who worked with Baldassare on the study.
It was the first time the survey analyzed responses by income levels.
The overall Orange County index inched up one point to a record 112, beating a comparable national index by three points. Earlier in the decade, when Orange County was slumping and in the throes of bankruptcy, local residents were more pessimistic than the nation. Apart from that, Orange County has consistently had higher readings.
An index score of 100 or better is considered very positive.
The survey found that 70% of Orange County residents expect the U.S. economy to perform well in the coming year, just one percentage point off from last year. And a record 60% expect the American economy to remain strong in the next five years, up 2 percentage points over 1999.
The survey’s results are consistent with the findings of two recent studies. A UCI survey of business leaders released in late April found four of five local executives expected their companies this year to surpass their 1999 results. At the same time, economists at Cal State Fullerton upgraded their outlook for the county’s employment growth rate this year to a robust 3.2%, or 42,000 new jobs, from a previous forecast of 2.8%.
Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University, said residents are feeling buoyant because key economic indicators that most affect them have registered strong gains in recent years.
Between 1994 and 1999, he said, Orange County added 218,000 new jobs, a 19.4% jump; personnel incomes rose by 36%; and the value of the typical home appreciated by 22%.
The stock market’s volatility remains of concern to most people. But even that no longer spooks them the way it once might have, Adibi said, because it has bounced back after major dips.
Notably, confidence among Orange County’s Latinos is extremely high, the survey said. About 60% said they expect to be better off next year, versus 51% for all Orange County residents.
“Latinos are making more money than ever,” said David Scarbrough, treasurer of the Hispanic Chamber of Commerce of Orange County. “Many of them are starting their own businesses to realize the American dream of owning a better house and car. Times are good.”
Indeed, the unemployment rate for Latinos in California dropped to a record low of 6.5% in April, according to the latest state figures. Orange County is home to about 800,000 Latinos, who account for 28% of the population.
UCI’s latest survey results were compiled from telephone interviews conducted between May 3 and May 14 with 1,005 randomly selected Orange County adults.
The consumer confidence survey, which was conducted earlier than usual to prevent it from being overshadowed by upcoming national elections, is the first part of UCI’s annual Orange County survey. Results of the entire poll, which includes residents’ views on housing, quality of life, education and other issues, are scheduled to be released later this month.
* COOL-DOWN PERIOD
National data indicate an economic slowdown. C12
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Rosy Glow
Consumer confidence has reached its highest level since 1986 in Orange County, according to an annual UCI survey.
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1986 109 92 1987 104 94 1988 106 95 1989 105 96 1990 85 76 1991 84 82 1992 75 77 1993 73 75 1994 89 92 1995 90 94 1996 101 95 1997 110 107 1998 105 100 1000 111 105 2000 112 109
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Source: UCI Orange County Annual surveys, University of Michigan
