Confidence gains for metro area consumers
The share of consumers who said in May that they plan to buy a home in the next six months is the highest in five years. Above, an open house in Remsenberg. (May 11, 2012) Credit: Gordon M. Grant
Buoyed by a dip in gasoline prices, consumer confidence in the metropolitan area recovered last month after April's decline.
The Siena College Research Institute Monday reported its confidence index for Long Island, New York City and the northern suburbs climbed 1.5 points to 77.9 in May. The index was 76.5 in April, down sharply from March's 81.6 -- the highest reading since July 2007.
Separately, Siena said that the share of residents statewide who plan to buy a house in the next six months was 5.7 percent in May, the highest level in five years.
"With the current mood lifting among consumers, home buying showing signs of activity and gas price anxiety lessening, New Yorkers are beginning to put the recession behind them," said Douglas Lonnstrom, who founded the research institute.
Despite the ups and downs of the past few months, the local confidence index has been above 75 for five straight months. That's the level indicating the number of people who are optimistic about their economic well-being exceeds those who are pessimistic.
However, the May survey was conducted before the recent sell-off on Wall Street, caused by the debt crisis in Europe and signs of slower U.S. economic growth.
The statewide index increased 2 points to 76.6. "The drop in gas prices clearly helped to boost consumer confidence, as concern about fuel costs on the family budget declined by nine percentage points, the biggest one-month decline [from April] since the fall of 2008," Lonnstrom said.
In the metro area, the number of residents citing pump prices as either "a somewhat or very serious problem" fell to 52 percent last month compared with April, also a drop of nine points.
Retailers follow consumer confidence because it often signals the willingness of shoppers to open their wallets. Consumer spending accounts for about 70 percent of economic activity nationally.
Statewide, the spending plans of residents were largely bullish. When asked about big-ticket purchases between now and November, consumers told Siena they were more likely to buy cars, furniture, homes or start a major home-improvement project. However, fewer people expected to buy a computer.
At Huntington's Walt Whitman mall Monday, some shoppers said they were house hunting, but none expressed concern about recent stock market declines.
"There are a number of homes for sale in our town," said Rebecca Stuart, 30, a mother of one from Northport. She said she and her husband "might take the plunge if the price is right because mortgages are so cheap right now."
Buying Plans
Percentage of New York State residents saying in May that they planned to buy big-ticket items in the next six months.
19.5 percent plan to buy furniture, up 1.7 percentage points from May 2011
16.6 percent plan a major home improvement, up 2.4
13.9 percent plan to buy a computer, down 0.5
12.9 percent plan to buy a car or truck, up 1.7
5.7 percent plan to buy a home, up 2.5
Source: Siena College Research Institute survey of 801 New York State residents over age 18 in May.
