The so-called economic slump could be starting to straighten out according to results from a Siena Research Institute poll last month that indicated consumers are not only buying more lately, but buying bigger items.
The consumer confidence index poll is taken monthly, utilizing data from about 600 New Yorkers from throughout the state according to Douglas Lonnstrom, founding director of the Siena Research Institute.
According to Lonnstrom, the SRI has been conducting the index every month since January of 1999 and its results are used by the Federal Reserve Board and New York State Comptroller’s Office.
In the survey, people are chosen at random and asked whether in the next six months they are planning to buy a particular item. Those numbers are then compared to surveys past and used in a mathematical equation to determine whether consumer confidence is increasing or decreasing.
Lonnstrom said the index showed the last quarter of last year as one of the worst times for consumer confidence since the survey has been conducted.
While in the past year, the numbers showed a decrease in consumer spending, the index suggests that in the second quarter of 2009, consumer confidence has increased in seven of the nine New York regions surveyed.
For the second consecutive quarter, consumer confidence continued to recover from the abyss of last fall, Lonnstrom said in a written release. `But recovery is coming to New York slowly by region. Albany, Mid-Hudson, New York City and Long Island are seeing the light at the end of a tunnel that Rochester, Utica, Syracuse, Binghamton and Buffalo have only just entered. Buying plan increases outpaced declines by a two to one margin with cars, furniture and major home improvements leading the way.`
Aside from home improvements, Lonnstrom said home buying in general has seen an increase in the second quarter.
`Certainly buying plans and consumer confidence go hand in hand, so if people are getting more confident about the future, then they’re more likely to buy more,` he said.
The Albany area saw the highest increased percentage of those who either bought or are planning to buy a home in comparison to the other regions surveyed. With the recent increased tax credit the federal government is providing first-time homeowners, James Ader, CEO of the Greater Capital Association of Realtors, Inc., said he can see why.
Ader said he can tell that the market is getting better judging by his business alone.
`I would tell you my numbers tell me the market is getting better,` he said.
Not only has Ader seen an increase in interest of buying homes, but consumers taking the steps to make purchases more willingly than in previous months.
`It’s really just been as recently as June that we saw that increased buyer activity turning into contracts of sale,` he said.
While the numbers appear to be getting better, Ader said the Capital District started off with an advantage in that the area was not hit as hard by the economic decline as other parts of the country since the market in the Capital District has been declining more slowly instead of suddenly.
`Our markets have declined for the past 12 months, but not precipitously like other parts of the country, he said.
Lonnstrom said he believes that two things happened that have affected consumer confidence.
`One is, we’re beginning to see some pent-up demand, people backed up from buying for quite a while, and there are now great bargains out there,` he said. `So we got two things that maybe are looking up for us. So the two of those things together are starting to move us forward.“