RBC Bank's Southeast Consumer Outlook Index Shows Region's Current Confidence Maintains 4th Quarter Levels
Cloudy Jobs Picture Stymies Southeast’s Pace of Improvement; Future Outlook Is Positive
Raleigh, N.C. – March 8, 2011 – Overall consumer confidence across the Southeastern United States lost momentum in the first quarter of 2011, coming in at exactly the same level as during the last quarter of 2010, according to the RBC Southeast Consumer Outlook Index (COI), released today.
The Southeast region’s current confidence rating is flat in contrast to the national COI for the period, which was up over the fourth quarter of 2010. The current RBC Southeast COI results show the Southeast lags the rest of the nation slightly, while nationwide results show three straight quarters of improved levels of confidence. For the first quarter of 2011, the overall RBC Southeast COI continues at 42.6; the nation’s COI is at 43.9 for the period, up from the 42.7 level seen nationally in the fourth quarter of 2010.
“Worry about employment creates cautious spending and investing by consumers, and understandably creates an atmosphere that weighs down current confidence levels,” said Tom Porcelli, Chief U.S. Economist for RBC. “But, in spite of current concerns about jobs, the COI shows a positive outlook about the Southeast’s economic future, and that is a good sign for the region.”The RBC Southeast COI compiles quarterly data for the six U.S. Southeastern states of North and South Carolina, Georgia, Florida, Alabama and Virginia, gathering comparative data on the region’s take on Current Conditions, Jobs, Investment and Expectations. The historical mean for the COI is 50, which indicates a score over 50 represents above average consumer confidence and a score below 50 represents below average consumer confidence.
For the first quarter of 2011, the RBC COI Current Conditions assessment in the Southeast has continued to show improvement, up to 32.3 in the first quarter from 31.9 in the fourth quarter of 2010. While improving, the region is not keeping pace with the national number of 34.2 for the current quarter. Consumers in the Southeast remain less comfortable about their ability to make major purchases (50 percent said they are less comfortable) or household purchases (37 percent said they are less comfortable) than consumers nationwide (45 percent said they were less comfortable making major purchases, and 34 percent said they were less comfortable making major household purchases).
The strongest driver of the recovery in consumer confidence nationally is improvement in perceived job security. However, the RBC COI Jobs in the Southeast for the first quarter of 2011 has worsened slightly to 48.7, down from the 49.6 seen in the fourth quarter of 2010. Residents of the states of Georgia (60 percent) and Virginia (50 percent) have the greatest experience with job loss in their immediate circle over the last six months. The overall rate of experience with job loss in the Southeast has climbed to 47 percent (from 46 percent in the fourth quarter of 2010).
The RBC COI Investment for the Southeast came in at 36.7 for the first quarter of 2011 – a minor improvement from the fourth quarter 2010’s 36.6. However, in an absolute sense, consumers remain very concerned about the investment environment. Consumers in North Carolina (46 percent) are the most likely to say it is a bad time to invest in the stock market. Meanwhile, consumers in Florida (44 percent), North Carolina (43 percent) and Virginia (41 percent) are the least confident that it is a good time to buy real estate.
Southeastern consumers continue to be more optimistic about their economic future than the nation as a whole. The RBC COI Expectations stands at 55.5 for the first quarter of 2011. This is slightly above the 55.4 mark in the fourth quarter of 2010 and well above the 54.8 score for the United States as a whole in the first quarter. Residents of Virginia (28 percent) and Alabama (28 percent) appear to be the most positive about the future of their local economy. Residents of South Carolina (42 percent) and Alabama (41 percent) appear to be the most positive about their personal financial situation.
About the RBC Consumer Outlook Index
The RBC Consumer Outlook Index Study is conducted by Ipsos-Public Affairs. Between October and December 2010, the RBC COI poll interviewed representative online panel of at least 1,000 adults nationwide each month; 3,000 interviews were conducted over the last six months.
Starting in November 2010 the RBC COI was re-scaled to correspond with a 0-100 scale in order to maximize interpretability of month-to-month and year-over-year changes in consumer outlook. The Consumer Outlook Index is still based on the same set of underlying questions and continues to capture the same sense of American consumer confidence. The new bounded range for the RBC COI produces more controlled monthly fluctuations, which enables greater ability to diagnose meaningful changes across the time series. Ipsos has retroactively calculated the re-scaled score for all historical data.
About RBC Bank
RBC Bank, headquartered in Raleigh, N.C., offers a wide range of financial services and advice to individuals, businesses and public institutions throughout the Southeast. RBC Bank’s network includes more than 420 full-service banking centers in six states (Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia), an extensive ATM network and telephone and online banking. RBC Bank is the 40th largest U.S. bank by consolidated assets, according to SNL Financial’s List of the Nation’s 50 Largest Banks, September 2010. RBC Bank is a wholly-owned subsidiary of Royal Bank of Canada (RBC) (RY on the TSX and NYSE), Canada's largest and most stable bank as measured by assets and market capitalization. In August 2009, Global Finance Magazine ranked RBC as the safest bank in the Western Hemisphere. RBC is also one of the world's financial, social and environmental corporate leaders, having appeared on the Dow Jones Sustainability World Index every year since its creation in 1999. Additional information about RBC Bank may be found at www.rbcbankusa.com.