Consumers in the Buffalo Niagara region aren’t starting the year in a spending mood.
A new survey released Wednesday by researchers at Siena College found that local consumers were less willing to spend on major purchases during the first quarter of this year than they’ve been since the end of 2011.
The local drop in consumer confidence mirrored a decline across the state and the nation, as rising gasoline and food prices, federal budget cutbacks and a sluggish job market continued to put a damper on spending plans.
In the Buffalo Niagara region, consumer confidence dropped to its lowest level in more than a year in a significant reversal after sentiment levels rebounded to a 5½-year high during the final quarter of last year, according to the Siena Research Institute, which conducts a quarterly survey of consumer confidence in New York’s major cities.
At that time, Siena researchers said consumers were stepping up their spending plans after keeping a tight rein on their budgets during the recession. But in the latest survey, consumers indicated that they were again shifting back to their tight-fisted ways as they see “more dark clouds than sunshine” on the horizon, said Douglas Lonnstrom, the founding director of the Siena Research Institute.
Consumer confidence weakened by almost 6 percent in the Buffalo Niagara region during the first quarter, wiping out all of the gains from last year’s steadily improving sentiment levels and leaving them 1 percent lower than they were a year ago. Confidence levels, however, still are 38 percent better than they were at the depths of the recession more than four years ago.
“I was kind of startled by these figures,” Lonnstrom said. “We get a little bit of good news – like the stock market hitting a new high or the housing market [strengthening] – but it’s immediately offset by some bad news, like the last jobs report.”
Confidence levels in Buffalo Niagara are almost 10 percent lower than the national levels, and they are 7 percent below the statewide rate, Siena said.
The survey of 400 consumers measures their willingness to spend on a wide range of items, from vehicles and furniture to computers and home improvements.
“People are just going to be somewhat reluctant to spend their money unless they see something fairly secure, and I think a big part of that is improvement in the job market,” Lonnstrom said. “Gas and food prices are hurting families.”
Consumers across New York shared the downbeat mood of Buffalo Niagara consumers. Confidence levels dropped in each of the nine major cities included in the Siena survey, with the decline in the Buffalo Niagara region ranking in the middle of the pack statewide. Sentiment levels weakened the most in Rochester and Utica, and they fell the least in the Long Island and New York City markets, the survey found.
With the first-quarter decline, confidence in the Buffalo Niagara region now ranks sixth among the nine major metro areas included in the survey, topping only Utica, Binghamton and the mid-Hudson Valley.
The survey also continues to show a wide gap between the current buying plans of local consumers and their plans for future spending. While consumers in Buffalo Niagara ranked second statewide on their willingness to spend now, they ranked third from last on their long-term spending plans. ...
Consumer confidence tumbles from a high Quarter Index
1st quarter 69.9
4th quarter 74.2
3rd quarter 70.8
2nd quarter 72.2
1st quarter 70.8
4th quarter 64.6
3rd quarter 61.1
Major cities statewide:
Metro area Index
New York City 82.4
Long Island 72.6
Source: Siena Research Institute