Arkansans Positive About Buying Conditions

Arkansas consumers anticipate making large purchases now because they are seeing low unemployment rates, lower interest rates and the possibility of inflation looming on the horizon.

Those are among the more noticeable findings from the third installment of the Spring 2016 Arvest Consumer Sentiment Survey released June 28. This installment is the final piece of the survey, conducted in March, and focuses on consumers’ attitudes concerning spending, saving and debt.

From September to March, Arkansas consumers’ household savings rate increased from 13.9 percent to 16.4 percent, and the percentage of those planning to increase their savings rate rose from 14 percent to 21 percent.

But they also see the next six months as a time to go ahead with planned purchases before prices start going up, according to Kathy Deck, director of the Center for Business and Economic Research ( CBER) in the Sam M. Walton College of Business at the University of Arkansas and lead economist for the survey.

“With gas prices and interest rates remaining low and incomes rising, Arkansans were most positive about the idea that buying conditions are at an attractive level right now,” Deck said. “With such low unemployment rates, there may be inflationary pressures building in the state’s economy, so large purchases are particularly appealing right now.”

In Arkansas, 30 percent said they plan to make a major household purchase in the next six months, up from the 24 percent reported in September. Major household purchases include items such as furniture, televisions and refrigerators. Those who said they had made a major household purchase in the past six months went up 2 percent to 39 percent in March.

For Arkansans planning on acquiring debt in the next six months, the largest percentages were those seeking auto loans and credit cards at 7 percent. Those seeking mortgage loans was up to 6 percent, and those who said they would seek student loans fell to 4 percent.

Arkansans’ consumer debt continued to remain below that of their neighbors in Missouri, including Greater Kansas City, and Oklahoma in all categories. Arkansas respondents reported that 30 percent had mortgages in March, 2 percent had home equity loans, 29 percent had auto loans, 40 percent had credit card balances and 18 percent had student loans. Those who reported having no outstanding debt was 23 percent.

The Arvest Consumer Sentiment Survey is conducted by the CBER, which also evaluates the Arkansas data, with the University of Oklahoma’s Public Opinion Learning Laboratory conducting 1,200 random phone and online surveys. The survey is conducted twice a year, with the next results expected to be released in October.