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Contact: Karen Morris, (949) 824-7913, [email protected]
ORANGE COUNTY CONSUMER CONFIDENCE IN U.S. ECONOMY REMAINS STRONG DESPITE FINANCIAL TROUBLES AT HOME AND ABROAD
Positive Outlook Slightly Diminished by Discomfort Over Asian Economic Crisis, Particularly Among County's Asian Residents
Irvine, Calif., Sept. 24, 1998 - Despite an erratic stock market, political scandals at home and financial crises abroad, Orange County residents remain strongly optimistic about the nation's economic future, according to UC Irvine's 1998 Orange County Annual Survey.
The Consumer Confidence Index in Orange County stands at 105-down from 110 in the 1997 survey, but still ahead of the national index, which dropped from 107 last year to 100.
The five-point drop in the index in Orange County can be attributed partly to concern over local fallout from Asia's economic meltdown, said UCI professor Mark Baldassare, who co-directed the survey with research associate Cheryl Katz. Sixty-one percent of those surveyed say the Asian crisis will hurt the Orange County economy in the next year, including 15 percent who say it will do a great deal of harm and 46 percent who say it will do some harm.
"Consumer confidence remains very strong despite all the turmoil in financial markets and in Washington politics," Baldassare said. "During the two weeks the survey was done, the Starr report was coming out, the stock market was seriously troubled-we were getting more and more bad news from abroad.
"To some extent, there has been a deterioration in confidence, especially in regard to what is expected in the U.S. economy over the next 12 months, compared to the wild enthusiasm of the 1997 report. And that decline seems to be in part due to the Asian crisis. But these are still very good numbers. The national score of 100 is very good news; ours is even better."
The 17th Orange County Annual Survey of 2,002 adult residents was conducted by telephone from Sept. 1-13, using a computer-generated random sample of telephone numbers. Interviews of randomly selected adult household members were conducted in English, Spanish and, for the first time, in Vietnamese. Twice as large as previous surveys, the 1998 survey has a margin of error of plus or minus 2 percent. The survey includes five questions that also are used in the national consumer confidence survey conducted by the University of Michigan. The Consumer Confidence Index is calculated from scores for each question, adjusted by the 1966 base period score of 100. A score of 100 is considered very positive.
Responses to individual questions in the Consumer Confidence Index reflect Orange County consumers' short-term misgivings and long-term confidence:
Consumers' optimism about the year ahead has declined by 14 points since last year-59 percent expect good times for the U.S. economy next year, compared to 73 percent in 1997.
For the long term, the 1998 survey posted a highly positive outlook: 56 percent, the same proportion as last year, believe the country will continue to have good economic times during the next five years, while 30 percent expect bad times.
As they did last year, Orange County consumers say it's a good time to spend money, with 72 percent responding that this is a good time for major purchases such as furniture or home appliances.
Fifty-one percent say they're better off financially now than they were a year ago; only 15 percent say they are worse off.
Forty-nine percent expect to be financially better off next year, while only 5 percent expect to be worse off.
While overall positive views on personal finances and spending remained statistically unchanged from last year, the 1998 survey did show differences along ethnic lines. Confidence ratings of non-Hispanic whites were contrasted with Latinos and, for the first time, with Asians-the two fastest-growing consumer groups in Orange County.
While the indexes for non-Hispanic whites (106) and Latinos (105) are only a point apart, the index for Asians dropped to 98. Asians are less likely than the other two groups to think now is a good time to make major purchases or to have a positive outlook on the U.S. economy. They also have a gloomier view of the Asian financial crisis: 23 percent think it will hurt the Orange County economy a great deal in the next year or so, compared to 15 percent of non-Hispanic whites and 11 percent of Latinos.
"This is the most troubling part of the report," Baldassare said. "Asian residents may have some insight into Asian markets-more information, more economic ties. They may have greater understanding and knowledge of Asian economies."
Latinos, on the other hand, responded more positively than others. Fifty-seven percent of Latinos expect to be better off next year, compared to 46 percent of non-Hispanic whites and 47 percent of Asians. And 65 percent of Latinos predict good times in the U.S. economy next year, compared to 58 percent of non-Hispanic whites and 51 percent of Asians.
"This illustrates the bullish nature of Latino attitudes--they feel good about the economy," Baldassare said. "We're seeing the increasingly important part Latinos can have in the Orange County economy."
UCI's Orange County Annual Survey is the most comprehensive poll of Orange County residents. Since 1982, it has been conducted by Baldassare, a professor of urban and regional planning in the UCI School of Social Ecology and a senior fellow of the Public Policy Institute of California.
Complete results of the survey-including residents' views on housing, education, quality of life and other issues-will be released in November.
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