Confidence on Economic Conditions Remains Low

The sentiment of Florida consumers remained fairly gloomy in September. That’s according to the latest survey tracking the economic outlook of Floridians conducted by the University of Florida’s Bureau of Economic and Business Research (BEBR).

The monthly index stood at 64.4 in September, down 14% from 74.9 a year earlier. (See Figure 1.) The index ticked up from a revised figure of 64.1 in August but remained well below the level of four and five years ago (Figure 2) — and comparable with levels during the U.S. recession in 2008.

Figure 1 – Source: UF Bureau of Economic and Business Research

Figure 2 – Source: UF Bureau of Economic and Business Research

“Floridians are slightly more optimistic in September. Despite this positive change, confidence remains low at levels that are comparable to those observed during the Great Recession,” said Hector H. Sandoval, director of BEBR. For the monthly study, UF asks a demographic sampling of Floridians questions about the national economy and their personal economic situation now and in the future.

Surveyed Floridians said their personal financial situation right now was relatively flat in September, amounting to an index of 54, up from 53.8 in August but down from 71.4 in September 2021. Opinions about whether now is a good time to buy a major household item like an appliance declined slightly to 53.8 from 54.1; that’s down from 69.1 in September 2021. The views in the latest survey were divided across sociodemographic groups with men and people with an annual income over $50,000 expressing more favorable views. People aged 60 and over and those with an annual income less than $50,000 had by far the most negative responses to both questions.

Conditions were mixed in September when Floridians were questioned about the future. Asked to forecast their personal finances a year from now, opinions increased four-tenths of a point to 77.4. Similarly, expectations about U.S. economic conditions over the next year went up 1.8 points to 67. However, asked to gauge U.S. economic conditions over the next five years, the outlook was essentially flat.

Hurricane Ian

Sandoval indicated the impact of Hurricane Ian will have undoubtedly a negative impact on the state economy and consumer confidence. Ian made landfall on Sept. 28 and battered Southwest and Central Florida, causing the death of more than 100 people statewide and widespread damage to residential and commercial properties. CoreLogic said wind and storm-surge losses from Hurricane Ian could reach as $47 billion in Florida alone. “Hurricane Ian will be the largest hurricane loss in Florida history,” Karen Clark & Co., a catastrophe modeler, reported to the Insurance Journal.

Sandoval said the economic impact of Ian “creates an additional pressure to the state’s economy. Looking ahead, we expect consumer sentiment to decline in the coming months as the economy slows down due to interest rate hikes and the decline in economic activity brought by Hurricane Ian.”

UF’s study reflects the responses of a demographic cross section of 457 Florida adults who were surveyed Aug. 1 through Sept. 29. The index is benchmarked to 1966, which means a value of 100 equals the level of confidence that year.