Favorable Business Conditions Drive Jump in Current Outlook, But Utahns Less Sure About Future
Half of those surveyed indicate that rising housing costs negatively impact the Beehive State’s economy.
The Zions Bank Utah Consumer Attitude Index (CAI) increased 1.1 points to 111.9 in June. In comparison, the national Consumer Confidence Index® decreased 2.4 points to 126.4 this month.
The Utah Present Situation Index increased 5.1 points to 126.8 while the Utah Expectations Index decreased 1.5 points to 101.9, the lowest level since August 2016. The Present Situation Index rose as five percent in Utahns feel local general business conditions are good. Utahns were also more positive about jobs, with 59 percent feeling that jobs are plentiful right now, up two percent from last month.
The Utah Expectations Index dropped for the third straight month after its record high in March. This month’s decrease was due mostly to a dip in Utahns’ outlook on future business conditions, with five percent fewer Utahns feeling future business conditions will be better in six months. Year-over-year the Utah Expectations Index is 5.9 points lower than it was in June of last year.
Utahns’ satisfaction with the federal government is at the highest point since Zions Bank began measuring Utahns’ confidence in 2011 with 30 percent feeling the federal government is doing a good job with economic policy. Perceptions of the state government’s economic policy efficacy ticked down two percentage points, with 45 percent of Utahns indicating state government is doing a good job.
Seventy-six percent of Utahns expect housing prices to continue to rise over the next 12 months. At the same time, 61 percent of Utahns reported that housing in their area and within their price range is not readily available. Half of Utahns indicate that rising housing costs negatively impact Utah’s economy.
“We know that demand for housing in Utah, both to buy and rent, is high in Utah,” said Scott Anderson, president and CEO of Zions Bank. “About 60 percent of Utahns feel that housing in their area and price range is not readily available. Yet U.S. Census data shows that Utah’s home builders have been building at some of the fastest rates in the nation, increasing the total number of Utah’s single-family housing units by 2.1 percent from 2016 to 2017, faster than the second-highest rate in Idaho of 1.7 percent and the third-highest rate in Colorado of 1.6 percent.”
“Rising housing costs affect different segments of Utah residents in different ways,” said Randy Shumway, chairman and partner at Cicero Group. “Lower-income residents who don’t own real estate feel an acutely negative impact from rising housing costs because that increase comes straight out of their pocketbooks. Right now, 29 percent of Utahns reported paying 40 percent or more of their income toward housing. On the other hand, those who own real estate benefit from the increased equity value in their homes.”
Zions Bank provides the CAI as a free resource to the communities of Utah. The monthly CAI summary reports are released at a monthly press conference, coinciding with The Conference Board’s national CCI release date. Analysis and data collection for the CAI are done by Cicero Group, a premier data-driven strategy and research firm based in Salt Lake City. The July CAI will be released during a press conference at a local business at 10:30 a.m. on July 31, 2018.
Content is offered for informational purposes only and should not be construed as tax, legal, financial or business advice. Please contact a professional about your specific needs and advice. Content may contain trademarks or trade names owned by parties who are not affiliated with ZB, N.A. Use of such marks does not imply any sponsorship by or affiliation with third parties, and ZB, N.A. does not claim any ownership of or make representations about products and services offered under or associated with such marks.