RC Poll: Virginia Consumer Sentiment and Inflation Expectations Report
Virginians have again weighed in on their opinion of the economy. The Roanoke College Institute for Policy and Opinion Research (IPOR) surveyed 651 Virginians about their financial situation, general business conditions now and in the future, their inclination for purchasing durable goods, and their thoughts on prices in the near-term. Indexes of current conditions, consumer expectations, consumer sentiment, and price expectations were constructed using methods similar to the popular national measures out of the University of Michigan. This is the third survey from the IPOR on Virginia consumer sentiment and the second for price expectations. Both measures will be released quarterly beginning this year.
Virginia continues to improve, concerns over future
The Virginia Index of Consumer Sentiment (VAICS) is 81 in November, down from February 2012 (the date of the last report), but significantly higher than a year ago. The current value is in line with the national number of 82.7. Consumer sentiment has plateaued nationally, although it is at the highest level since September 2007.
Virginians report that household finances and business conditions are improved from a year ago, pushing the Virginia Index of Current Conditions (VAICC) up 4 points from February to 82. This is a good sign for holiday retail sales. The nation is also more positive about current personal finances and business conditions.
The drop in the VAICS is driven by a substantial reduction in Virginians' expectations of the future. The Virginia Index of Consumer Expectations (VAICE) is 79 in November, down 9 percent since February 2012. Consumer worries about the impending fiscal cliff and economic uncertainty could be behind the drop. Virginia is in line with the nation, as national expectations fell in November.
Northern Virginia falters, Central Virginia and Shenandoah Valley surge
Sentiments varied across the Commonwealth. The Shenandoah Valley was positive about today and the future. Specifically, Shenandoah Valley's VAICS increased by 15 percent since February, primarily from a 38 percent increase the VAICC. New job announcements from the McKesson Corp., Navy Federal and McKee Foods could be driving the optimism.
Northern Virginia (NOVA) experienced drastic reductions in all indexes, particularly the VAICE, which fell by 21 percent. NOVA's indexes were higher than the Commonwealth average for the past year. Currently NOVA ranks among the lowest regions in the state.
Inflation expectations in Virginia fall
Virginia's inflation expectation for next year is 2.2 percent. The long-term outlook is 3.6 percent. Seventy-six percent of Virginians believe that prices will increase over the next 5-10 years. Inflation expectations, both short- and long-term, have fallen over the year. National short-term inflation expectations are 3.1 percent, while the 5-10 year expectation is 2.8 percent, both significantly unchanged over the last few months.
Interviewing for The Roanoke College Poll was conducted by The Institute for Policy and Opinion Research at Roanoke College in Salem, Va. between November 13 and 16, 2012. The sample consisted of 651 residents of Virginia. The sample of phone numbers was prepared by Survey Sampling Inc. of Fairfield, Conn. and was created so that all residential and cell phone numbers, including unlisted numbers, had a known chance of inclusion. Nearly 23 percent of respondents were contacted via cell phone.
Questions answered by the entire sample of 651 consumers are subject to a sampling error of plus or minus approximately 4 points at the 95 percent level of confidence. This means that in 95 out of 100 samples like the one used here, the results obtained should be no more than 4 points above or below the figure that would be obtained by interviewing all consumers who have a telephone. Where the results of subgroups are reported, the sampling error is higher. Sampling weights were constructed using Virginia Census 2010 data by age, race, and gender groups.
A copy of the questions and all frequencies may be found here.
- Dr. Alice Louise Kassens, Senior Analyst, IPOR
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