Upstate, statewide consumer sentiment plummet in Q1 over coronavirus concerns

Consumer sentiment in upstate New York and across the state plunged in the first quarter as the shutdown of much of business and daily life took a toll.

The latest quarterly survey of upstate and statewide consumer sentiment that the Siena College Research Institute (SRI) released April 8 measured sentiment at 68.9 in the first quarter, down 23.5 points from the last measurement of 92.4 in the fourth quarter of 2019. 

Upstate’s overall sentiment of 68.9 was 2.5 points above the statewide consumer-sentiment level of 66.4, which fell 26.6 points from the fourth quarter.

The statewide figure was 22.7 points lower than the first-quarter reading of 89.1 for the entire nation, which was down 10.2 points from the fourth-quarter number, as measured by the University of Michigan’s consumer-sentiment index.

All three indexes for New York are below their breakeven points at which optimism and pessimism balance for the first time since December 2011. The national indexes dropped but remain above the breakeven point.

“As the coronavirus took hold of New York, consumer sentiment fell precipitously, signaled a sudden collective feeling of pessimism and reached a low not seen since 2011. A large plurality of consumers now think that the state’s business conditions this year as well as economic times over the coming five years are in trouble. Right now, 58 percent say that it is NOT a good time to buy major consumer items and plans to buy cars, electronics, furniture, homes and home improvements are down between 13 and 27 percent. In 20 years of tracking consumer sentiment in New York, we’ve seen more pessimism but never a drop this severe in this short of a time,” Doug Lonnstrom, professor of statistics and finance at Siena College and SRI founding director, said in the report.

In the first quarter of 2020, buying plans were down 2.8 percentage points since the fourth quarter of 2019 measurement to 18.8 percent for cars/trucks; fell 13.8 points to 38.6 percent for consumer electronics; slid 6.8 points to 24.2 percent for furniture; declined 3 percentage points to 8.1 percent for homes; and fell 6.2 percent to 19 percent for major home improvements.

In SRI’s quarterly analysis of gas and food prices, 26 percent of upstate respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 42 percent in the fourth quarter of 2019 and 41 percent in the third quarter. 

In addition, 27 percent of statewide respondents said the price of gas was having a serious impact on their monthly spending plans, which is down from 41 percent in the fourth quarter and 40 percent in the third quarter. Prices at the gas pump have fallen precipitously since the coronavirus crisis started, one of the few economic bright spots.

When asked about food prices, 49 percent of upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 56 percent in the fourth quarter and 56 percent in the third quarter.

At the same time, 55 percent of statewide respondents indicated the price of food was having a serious impact on their monthly finances, down from 58 percent in the fourth quarter and from 60 percent in the third quarter.

SRI conducted its survey of consumer sentiment between March 30 and April 2 by telephone calls to 402 New York adults via landline and cell phone. It has an overall margin of error of plus or minus 3.6 percentage points, according to SRI. 

Consumer sentiment in upstate New York and across the state plunged in the first quarter as the shutdown of much of business and daily life took a toll.

The latest quarterly survey of upstate and statewide consumer sentiment that the Siena College Research Institute (SRI) released April 8 measured sentiment at 68.9 in the first quarter, down 23.5 points from the last measurement of 92.4 in the fourth quarter of 2019. 

Upstate’s overall sentiment of 68.9 was 2.5 points above the statewide consumer-sentiment level of 66.4, which fell 26.6 points from the fourth quarter.

The statewide figure was 22.7 points lower than the first-quarter reading of 89.1 for the entire nation, which was down 10.2 points from the fourth-quarter number, as measured by the University of Michigan’s consumer-sentiment index.

All three indexes for New York are below their breakeven points at which optimism and pessimism balance for the first time since December 2011. The national indexes dropped but remain above the breakeven point.

“As the coronavirus took hold of New York, consumer sentiment fell precipitously, signaled a sudden collective feeling of pessimism and reached a low not seen since 2011. A large plurality of consumers now think that the state’s business conditions this year as well as economic times over the coming five years are in trouble. Right now, 58 percent say that it is NOT a good time to buy major consumer items and plans to buy cars, electronics, furniture, homes and home improvements are down between 13 and 27 percent. In 20 years of tracking consumer sentiment in New York, we’ve seen more pessimism but never a drop this severe in this short of a time,” Doug Lonnstrom, professor of statistics and finance at Siena College and SRI founding director, said in the report.

In the first quarter of 2020, buying plans were down 2.8 percentage points since the fourth quarter of 2019 measurement to 18.8 percent for cars/trucks; fell 13.8 points to 38.6 percent for consumer electronics; slid 6.8 points to 24.2 percent for furniture; declined 3 percentage points to 8.1 percent for homes; and fell 6.2 percent to 19 percent for major home improvements.

In SRI’s quarterly analysis of gas and food prices, 26 percent of upstate respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 42 percent in the fourth quarter of 2019 and 41 percent in the third quarter. 

In addition, 27 percent of statewide respondents said the price of gas was having a serious impact on their monthly spending plans, which is down from 41 percent in the fourth quarter and 40 percent in the third quarter. Prices at the gas pump have fallen precipitously since the coronavirus crisis started, one of the few economic bright spots.

When asked about food prices, 49 percent of upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 56 percent in the fourth quarter and 56 percent in the third quarter.

At the same time, 55 percent of statewide respondents indicated the price of food was having a serious impact on their monthly finances, down from 58 percent in the fourth quarter and from 60 percent in the third quarter.

SRI conducted its survey of consumer sentiment between March 30 and April 2 by telephone calls to 402 New York adults via landline and cell phone. It has an overall margin of error of plus or minus 3.6 percentage points, according to SRI.