Consumer optimism in Anchorage hit an all-time low in the first quarter of 2016, with an overall value of 50.3, according to the Anchorage Economic Development Corp.’s Anchorage Consumer Optimism Index (ANCi). Uncertainty surrounding the state’s operating budget, falling oil prices and layoffs are likely factors contributing to the drop in confidence.
Sponsored by KeyBank and produced by Northern Economics, Inc. on behalf of AEDC, the index measures Anchorage households’ optimism in the health of the local economy on a scale of 0 to 100. A value above 50 indicates an optimistic outlook on the economy while anything below 50 indicates lower confidence. In addition to determining an overall score, the index measures Local Economy Confidence, Personal Financial Confidence and Expectations for the Future.
While overall consumer optimism fell to 50.3, the Personal Finance Confidence score experienced a slight drop of only 1.3 points and maintained a significantly higher reading of 63.8.
“Although the ANCi hit an all-time low this quarter, we should remember that the numbers are still overall neutral,” said AEDC President and CEO Bill Popp. “A high point is that Anchorage residents are still confident in the Personal Finance category. While there is less optimism in our local economy, individuals are feeling secure in their own financial situations.”
This quarter, the index dropped to the lowest readings in the 6-year history of this report in the categories of Overall Confidence, Local Economy Confidence and Expectations for the Future. Local Economy Confidence fell 4.3 points to 52.8 and Expectations for the Future fell 2.9 points to 42.3, down 9.7 points from one year ago. Cuts to state programs, layoffs of state employees and the future of the Permanent Fund dividends are issues weighing heavily on residents and confidence levels are reflecting that.
“With the overall index now at 50.3, Anchorage residents are clearly feeling a sense of discomfort,” said Lori McCaffrey, KeyBank’s Alaska market president. “This speaks to the pressing need for a clear path forward for Alaska’s state budget.”
The full AEDC ANCi report, sponsored by KeyBank, is available here.