Aerial view of Scottsdale.
Here’s what consumers think about the health of Arizona’s economy
The Greater Phoenix Chamber recently released the Arizona Business Index™ (ABI™), powered by OH Predictive Insights (OHPI). The study measures and interprets the health of the Arizona economy from the perspective of the Arizona consumer. The Index reflects consumers’ perceptions of both current economic conditions and future expectations. In addition to consumer sentiment, the ABI™ provides insight into current public opinion regarding luxury purchases like housing and automobiles, the job market, economy, and personal credit card debt of Arizonans.
ABI™ is the first statewide index to focus on consumer indicators. ABI™ uses the same questions and formula created by the University of Michigan for its Consumer Sentiment Index (MCSI). The baseline of ABI™ was conducted in March 2020 and is updated quarterly.
Q3 Key Highlights:
• Consumer Sentiment Remains the Same – While the Q3 Consumer Sentiment trends up monthly during Q3, overall it remains the same from Q2 to Q3
• Housing Confidence Rose Sharply – Arizonans felt very optimistic about the housing market throughout Q3
• Job Satisfaction and Security Increase – Arizonans are enjoying their work as job satisfaction and job security levels rose six points back to pre-pandemic levels
“The Arizona Business Index will be a valuable tool for businesses as Arizona moves into economic recovery,” said Todd Sanders, president & CEO of the Chamber. “Understanding consumer sentiment throughout the state and across demographics will allow business leaders to make informed decisions that will allow their companies to grow and adapt to the quickly changing landscape.”
Arizonans’ future expectation is much more positive than the national future expectation. The MCSI Future Index decreased 6.4 points to 65.9 and rebounded to 75.6 in September. However, Arizona rebounded stronger, growing over 12% from July to September, while California grew 7.3%, Florida grew 6.7% and Texas grew 5.47%.
The Housing Index rose 48.3 points from July to September. More people believe now is a good time for a house purchase (+7.3%) and more people have a plan to buy a new home in the next 12-months (+2.1%). The younger generation shows a higher confidence about purchasing a home than the general public. More than 1 in 5 Millennials/Gen Z plan to buy a new home in the next twelve months. Another 28% of this younger generation is unsure whether or not they will buy a new home in the next twelve months. Hispanic (17%) and single persons (17%) are also high in their home purchase intentions, compared with others.
Arizonans feel more satisfied (+1.5%) and much more secure (+6.8%) about their jobs in Q3. However, there was a sharp decline in September, which we will continue to monitor in Q4. The Job Satisfaction Index rose 6 points from 94.6 in Q2 to 100.6 in Q3. This is especially true for Gen X, which rose 9.08 points in the Job Satisfaction Index, showing a higher confidence than other generations. Urban and Rural areas both have higher job confidence, while Suburban remains the same as Q2.
“Arizona saw a drop in confidence when the first spike in COVID-19 cases occurred, but as we moved further away from it, future expectations began to trend stronger than in the other states Arizona competes against,” says Mike Noble, chief of research for OHPI. “It will be interesting to see how the current spike will affect Arizona consumer confidence during Q4, and to see the results based on the political affiliation of respondents and the election results. Will those factors have an impact? And, how significant will that impact be?”
To see a full report, visit: https://phoenixchamber.com/wp-content/uploads/2020/10/Arizona-Buisness-Index-Q3-Executive-Summary.pdf.