FOR IMMEDIATE RELEASE:
Jan. 25, 2021
GREATER PHOENIX CHAMBER RELEASES Q4 ARIZONA BUSINESS INDEX
Consumer Sentiment, Job Market and COVID-19
PHOENIX, Ariz. (Jan. 25, 2021) – The Greater Phoenix Chamber recently released the Q4 Arizona Business Index™ (ABI™), powered by OH Predictive Insights (OHPI). The study measures and interprets the health of the Arizona economy from the perspective of the Arizona consumer. The Index reflects consumers’ perceptions of both current economic conditions and future expectations. In addition to consumer sentiment, the ABI™ provides insight into current public opinion regarding housing and automobile sales, the job market, the economy, and the personal credit card debt of Arizonans.
ABI™ is the first statewide index in Arizona to focus on consumer indicators. ABI™ uses the same questions created by the University of Michigan for its Consumer Sentiment Index (MCSI). The baseline of ABI™ was conducted in March 2020 and is updated quarterly.
“We are hopeful that Arizona will be a leader in economic recovery post pandemic,” said Todd Sanders, president and CEO, Greater Phoenix Chamber. “The 4th quarter ABI™ data shows that consumers were less optimistic about the pandemic, and we will be closely monitoring that sentiment as we continue the vaccine rollout over the coming months. Despite the anticipated and actual uptick in cases, fewer people were avoiding restaurants and cancelling vacations this quarter. Assuming that people are following recommended safety precautions, this is positive news for the local economy.”
Key Highlights on Consumer Sentiment, Job Market and COVID-19:
- Consumers’ current expectations and future expectations did not change significantly from Q3, in other words, they remained the same during Q4.
- The percentage of those who think their current financial condition is better than it was a year ago dropped 11% (28% to 18%) from October to December.
- The percentage of those who think that future business conditions will improve in the next 12 months dropped 7% (30% to 23%) from October to December.
- Job satisfaction dropped 6% (40% to 34%) from Q3 to Q4. It dropped 4% (34% to 30%) from November to December. Job security remained the same (with about two-thirds of Arizonans feeling secure in their jobs) from November to December.
- Half of employed Arizona consumers expect a raise, and 80% expect to work for the same company. One in four Arizonans expect to retrain or return to school (non-change across quarter/month).
- The percentage of those who expect the COVID-19 situation to become better in the next 30 days dropped 10% (31% to 21%) from Q3 to Q4.
- The percentage of those who expect the COVID-19 situation to become worse in the next 30 days increased by 15% (38% to 53%) from Q3 to Q4.
- However, fewer people are avoiding public gatherings (-3% from 87% to 83%), fewer are avoiding restaurants (-6% from 72% to 66%) and less people are canceling their travel plans (-3% from 75% to 72%) from Q3 to Q4.
Arizona Consumer Sentiment Compared to National Trends
- Both the University of Michigan Consumer Sentiment Index (MCSI) and the ABI-CS™ decreased during the first two months of Q4, reflecting a decrease in consumer confidence in both Arizona and the nation. However, the MCSI rebounded after the November drop while the ABI-CS™ kept moving down during December.
- Arizona Consumer Sentiment trended similarly to other states, including California, Texas, and Florida, with confidence peaking in October and declining in November and December.
“We will be closely monitoring the split we saw between the ABI-CS and the MCSI in December over the next quarter to determine if this is a trend, or an outlier based on the number of COVID-19 cases in Arizona,” said Mike Noble, Chief of Research & Managing Partner, OH Predictive Insights. “Additionally, keeping a close eye on how Arizona is trending in comparison to other key states will assist our local leaders in continued planning to ensure that our state remains a leader in economic recovery.”
About the Greater Phoenix Chamber
Representing 2,400 businesses across the Greater Phoenix region, the Greater Phoenix Chamber promotes regional prosperity by serving as a catalyst for economic vitality and strong communities. The Chamber pursues this mission by collaborating with business, political and community leaders to grow the regional talent pool, create a regional approach to economic development and drive a pro-Arizona agenda.