PANAMA CITY — Florida consumers are more positive about the economy than they’ve been in more than seven years, according to a report released by the University of Florida Survey Research Center’s Bureau of Economic and Business Research last month.
The consumer sentiment index, calculated through a random survey of 500 Florida households, showed a post-recession high of 86, an increase of two points from October.
“While we are still a bit behind where we should be this far out from the end of the recession, this rise in sentiment bodes well for the holiday season,” said survey director Chris McCarty. “While retail sales have been mixed over the past year and actually declined in September, expectations are that this will be an excellent holiday season with growth forecast at more than 5 percent.”
According to the Florida Retail Federation, the state’s 5 percent growth in the holiday shopping forecast outpaces the expected national increase of 4.1 percent.
McCarty cited the forecast as a result of several factors, including a rising number of jobs in Florida, lower gas prices, a high stock market, relatively stable housing prices and pent-up demand after a weak holiday season last year. The index measures perceptions of personal finance, economic conditions and purchasing confidence.
While Florida’s consumer sentiment climbs, confidence in the Panhandle so far this year remains the lowest in the state.
A measure of the consumer sentiment index in 2014 showed the Fort Walton Beach-Crestview-Destin, Pensacola-Ferry Pass-Brent, and Panama City-Lynn Haven-Panama City Beach metro areas as carrying the lowest confidence in Florida, with ratings of 68, 71 and 74, respectively.
However, officials with the UF Survey Research Center cited the margin of error as much higher for metropolitan area surveys, about 9 percent, than state surveys due to a smaller sample size. Florida’s monthly consumer sentiment surveys carry a margin of error of about 5 percent.
The 2014 index for the region as a whole, including Bay, Walton, Okaloosa, Santa Rosa, Washington, Holmes and Escambia counties, hovers around 71, up from 65 last year and 70 in 2012. The regional margin of error is under 4 percent.
While many of the state’s economic factors have shown signs of improvement this year, McCarty said November’s 86-point index is still about eight points lower than it should be five years post-recession. He described the index as “not a historically great number.”
Overall, McCarty said the recovery from the recent economic recession has been much slower than past recoveries.
“The jobs are slower to come back and the labor force participation rate remains very low,” he said. “A lot of people who lost jobs just haven’t come back” to the labor force.
Moving forward, McCarty cited 2015 as a potentially tough year economically as the U.S. Federal Reserve faces a $4 trillion balance sheet built up during the economic recovery.
“You can’t go and print $4 trillion; you have to get it back,” McCarty said, adding that payback would come from the Fed raising short-term interest rates, which likely would increase mortgage rates. “Once the Fed starts raising short-term interest rates, I just don’t see how mortgage rates are not going to respond.
“We’re definitely in some kind of recovery; the question is whether it’s a recovery that could sustain that shock.”