Local consumer sentiment survey more positive than expected
Cash Saver employee Kiara Jones stocks the shelves of the Midtown grocery store June 18, 2020. (Patrick Lantrip/Daily Memphian file)
Consumer sentiment in the Memphis MSA is, unsurprisingly, more negative than last year, according to an annual survey just released, but it’s not as “devastating” as expected.
The third annual Paragon Bank Memphis Consumer Sentiment Survey was released Thursday, Sept. 17. It was conducted by the Sparks Bureau of Business and Economic Research at the University of Memphis and led by Dr. John Gnuschke, chief economist, and Dr. Ryan Hanson, GIS projects manager.
All 650 respondents were residents of Shelby County and DeSoto County in North Mississippi, spanning more than 40 ZIP codes.
The survey offers insights into local consumer confidence, how it has changed within the past year and, in this version, how the COVID-19 pandemic has affected those sentiments.
“Obviously, I expected consumer sentiment to be more negative than it has been in the past, and that’s clearly the case,” Gnuschke said. “As we entered into 2020, we expected 2020 to be a good year. No one expected the economy to be shut down, and no one expected the coronavirus.”
As expected, attitudes among both younger and older respondents were more negative this year than in the previous two years, but they weren’t “devastatingly different” between the two groups.
Gnuschke said the more positive responses were likely due to COVID-19 only impacting 25% of respondents; the other 75% indicated they did not suffer a job loss or income loss.
“They were concerned about the economy, and they were concerned about the issues that we face, but it wasn’t a devastating report,” Gnuschke said.
Hanson believes the responses were more positive than expected because the survey was conducted in July rather than earlier in 2020.
“If we had done it in March or April, we would have had a completely different outcome,” Hanson said. “We were bouncing back quickly, and our findings found that.”
The survey comprised 13 questions about consumer sentiment and two newly added questions regarding the impacts of COVID-19. It can be accessed here if you register.
The Paragon Bank Memphis Consumer Sentiment Survey is unique in that it applies specifically to the Memphis metropolitan area. Other surveys are conducted on a national or state level.
One such survey is the NFIB Optimism Index, which, for the state of Tennessee, increased 1.4 points in August to 100.2, a reading slightly above the historical 46-year average.
The NFIB Uncertainty Index rose two points in August to 90, the second-highest reading since March 2017. The record reading of 100 was reached in November 2016.
“Small businesses are working hard to recover from the state shutdowns and effects of COVID-19,” NFIB chief economist Bill Dunkelberg said in a statement. “We are seeing areas of improvement in the small business economy as job openings and plans to hire are increasing, but many small businesses are still struggling and are uncertain about what the future will hold.”
Outlook 2020 Memphis Economic Survey echoed this uncertainty, with many people responding “don’t know” to several of the questions, which Paragon president and CEO Robert Shaw says is indicative of the uncertainty in the economy.
“I think (the survey) gives all of us a gauge of kind of what’s going on in the economy,” Shaw said. “It might help people as they’re trying to make decisions on hiring or if you’re thinking about making a job change.”
For the first two years, the surveys were conducted via landline telephones, which made the average demographic skew older. Because of the pandemic, the survey was conducted online this year, which Hanson said had helped to have a more balanced demographic base.
“I think that younger people of working age who are working and have children are feeling the effects of this economy,” Hanson said. “But older people, they’re not without effect, either. Really, everybody’s life is disrupted. I think we’re all kind of put out by (the pandemic), and the survey really has shown that.”
Gnuschke said the pandemic has impacted younger people more, based on the responses, and they were more subject to be concerned about the future.
“I think older people were less harmed by the coronavirus, and, consequently, they were more positive about the future and what to expect,” he said.
Paragon sees value in continuing to sponsor the survey every year.
“We’re committed to doing this and watching the trends,” Shaw said. “Hopefully, next year, we’ll see some real positive changes.”
Christin Yates
Christin Yates is a native Memphian who has worked in PR and copywriting since 2007. She earned her B.S. in public relations and M.S. in mass communications from Murray State University.
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