Valley residents are more optimistic about their financial prospects and the region’s economy than they were a year ago, according to surveys conducted for the Central California Business Review.
The 2019 survey was the third annual look at consumer confidence in the region and was conducted among 1,783 residents in Fresno (52.7%), Merced (12.8%), Tulare (19.8%), Madera (7.5%) and Kings (7.3%) counties in November and December. The survey was sponsored by EECU.
The Future Looks Brighter
In general, Valley residents are more pessimistic about the past and more optimistic about the future when compared to the respondents of a 2018 annual national survey conducted by the University of Michigan.
Sarofim said he believes that this is in part because people who don’t progress as much financially as they had hoped tend to be more optimistic about their prospects for future growth, which he calls a “compensatory emotional mechanism.”
In addition, the high number of Valley residents who profess a religious faith may also help explain the region’s relative optimism, Sarofim said. He said his research has found a strong correlation between religiosity and hope.
Valley residents in 2019 reported smaller gains in their finances over the past year and past five years compared to the national survey, and they expect a smaller gain in household income in 2020.
Investment Is Key for Accountability
But Valley residents are more bullish about expected improvements in their finances in 2020 and over the next five years than the respondents in the national survey. About 47% in the Valley survey expect to be better off financially in 2020, and that proportion climbs to 55% by 2025.
They also beat the national average in their expectations for improvements in the region’s business and economic conditions in 2020. That positivity signals a higher level of trust and optimism, which legislators, policymakers, and business owners should recognize and be accountable for, Sarofim said.
It will require investing in the infrastructure that supports entrepreneurs as well as established businesses, which affects employment, he said.
“We should spare no efforts to make it a good future for them,” he said. “I’m thinking about the general business and economic conditions, and that the people expect them to be positive in the future, which puts a mandate on all of us to have good, resourceful expansion plans for businesses here in Central California.”
Additional Survey Findings
- More people expect a bigger hike in their income over price hikes in 2020 than the year before. But those who expect bigger price hikes than income hikes totaled 31%, while those who expect bigger income hikes totaled 24%.
- Only 8% expect to be worse off in 2020 or five years from now.
- 87% expect that business conditions would either improve or stay the same in 2020.
Financing Debt, Student Loans
The survey also asked about major purchases and use of credit: 47% are carrying a balance on a credit card, 32% have an auto loan, 24% have a mortgage, 22% have a student loan, and 5% have a home equity line of credit.
Fewer respondents said they were planning to get a mortgage in 2020, and more expected to finance debt with credits cards or student loans than those surveyed the year before.
When asked about their purchases in the past six months, about 42% said they had purchased a major household appliance or furniture. Forty-six percent expect to make one in the first half of 2020.