The Index of Consumer Sentiment (ICS) for the Fort Smith region was higher for the first quarter ending March 31, according to the preliminary report released April 2 by the Center for Business Research and Economic Development at the University of Arkansas at Fort Smith.
The Fort Smith MSA consumer sentiment index was 58.1, up 11.3 percent from the fourth quarter result of 52.2.
The results were consistent with national results reported by the University of Michigan (UM) for March. The Michigan study reported a 78.6 in March, 7.8 percent higher than December. Yet, prospects for the regional economy were viewed as less positive by respondents, according to the report.
Dr. Kermit Kuehn of Fort Smith, center director, said, “Sentiment rebounded in March and reflected the generally good news we’ve been getting on the economy so far in 2013.”
Arvest Bank president Craig Rivaldo said the report was more positive overall.
“It was good to see consumer attitudes improve after last quarter’s sharp drop,” said Rivaldo, “But we still have challenges to overcome in the area in terms of increasing jobs and improving incomes.”
The report also outlined results for two sub-indices, both higher as well. The Index for Current Conditions (ICC), a measure of consumer attitudes about their current economic situations, increased 5.9 percent to 61.5. The Index for Consumer Expectations (ICE), which measures consumer feelings about future economic conditions, was up 15.3 percent over last quarter, recording a 55.9.
Index scores below 100 reflect less optimism about the economy than scores above 100.
Consumers appear to be cautious toward spending, feeling the pressure of stagnant incomes, according to the report. Results indicate that consumers were more focused on saving and debt reduction this year, suggesting that consumption will remain weak in the coming months.
Kuehn noted that consumer attitudes toward their current finances changed little from the previous quarter, but their views for their personal finances for the coming year were up significantly over last quarter.
He said that a detailed analysis of the entire 17-item survey distributed to 3,000 regional households will be published in the Fort Smith Regional Economic Outlook Report, a quarterly report sponsored by Arvest Bank, which is expected to be released the second week of June.
The upcoming Fort Smith Regional Economic Forum will be July 10 on the UAFS campus and feature St. Louis Federal Reserve economist Kevin Kliesen and CBRED’s Kuehn.