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Consumer confidence drops in Florida, UF survey finds

By Palm Beach Business.com

DELRAY BEACH — This won’t come as much of a surprise, but consumers aren’t in the best of moods as the holiday shopping season begins.

Separate reports released Tuesday showed consumer confidence moving higher nationally while falling slightly in Florida. While stronger than a year ago, confidence as illustrated by the two surveys remains low by historical standards.

The Conference Board’s national consumer confidence index rose 4.2 points in November to 54.1 as expectations for the future rose sharply. Meanwhile, the University of Florida’s index for the Sunshine State fell one point to 72.

“Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season,” said Lynn Franco, director of the Conference Board’s consumer research center. “Consumers’ assessment of the current state of the economy and job market, while only slightly better than last month, suggests the economy is still expanding, albeit slowly. Expectations, the main driver of this month’s increase in confidence, are now at the highest level since May. Hopefully, the improvement in consumers’ mood will continue in the months ahead.”

However, Chris McCarty, director of the UF survey, said the Florida index is only eight points above its all time low of 64.  High unemployment persists and the housing market — a major driver of Florida’s economy — continues to slump. Tourism, which has picked up in recent months, is one of the few bright spots.

“Looking ahead it now appears Florida consumers may remain at the current levels of optimism through the rest of the year,” McCarty said.  “It is important to note that at 72 consumer confidence is still quite low, although better than the reading of 69 from a year before. 

“As the holiday season is upon us this suggests a stronger retail sales season than last year, although last years weak sales make for an easy comparison.  Those retailers that survived this past year will have some relief, at least in the short run.  In the long run businesses will have to figure out how to become profitable without depending as much on consumer demand.  Many businesses have already done so by trimming expenses, largely in the form of labor, and increasing exports.  This may be a difficult transition for Florida which has been heavily reliant on housing growth and related industries from domestic migration.”

 

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DELRAY'S ONLINE BUSINESS AND COMMUNITY NEWSPAPER — PALM BEACH BUSINESS.COM
   
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NOVEMBER 30, 2010 click to go home
 
         
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