Columbus consumers optimistic about their economic future after 2016 election

Many Columbus consumers considered themselves worse off in 2016 than in 2105. Yet, they felt much more optimistic about their economic future than in previous years.

Those were among the insights revealed in two surveys conducted by the Butler Center for Business and Economic Research at Columbus State University — one assessing consumer economic attitudes after the 2016 election, and the other assessing such attitudes among local businesses. In both cases, they found increased optimism.

Benjamin F. Blair, the associate professor who directs the Butler Center for Business and Economic Research, said the surveys were conducted from about Nov. 15 to Dec. 15. When the Ledger-Enquirer sent him an email asking why he thought people were more optimistic after the election, he responded saying: “Some of the comments that people wrote indicated that they were optimistic about ‘changing the way Washington works’ and a change in economic policies that have resulted in an extended period of historically slow economic growth. The last year that we saw 3 percent economic growth was in 2005. The last two years, growth has been less than 2 percent.”

In response to a follow-up question about what impact the election of President Donald Trump may have had on the responses, Blair wrote:

“Whether you support him or not, all can agree that President Trump represents ‘change’ in Washington. His promises regarding economic policy — tax reform, a rollback of regulations, and, at a minimum, changes to the Affordable Care Act (Obamacare) — also represent a significant change in direction from the previous administration.”

In the survey of 3,000 households, local consumers were asked five questions:

▪ Are you better off or worse off than last year?

▪ Are you going to be better off or worse off next year?

▪ Will the country be better off or worse off next year?

▪ Do you think this is a good time to make a major household purchase?

▪ Will the country be better off or worse off in five years?

Using a metrics designed to measure pessimism versus optimism, researchers placed the percentage of responses on a scale from zero to 200, with zero being the most pessimistic and 200 being the most optimistic. A score of 100 would have indicated an equal amount of optimists and pessimists, suggesting a sense of indifference or status quo.

While the percentage dropped from 94.7 to 91.2 for the question comparing respondents’ sentiments about their economic status from 2015 to 2016, optimism increased in all other categories, resulting in a jump from 99.3 to 116.9 in their overall sense of financial well-being.

“Across the board, this year’s survey reflected the most optimism about the future than any of the previous years,” according to the center, which has conducted the survey annually for four years. “This may be the result of continued slow growth and reduced political uncertainty. The only factor weighing down the overall measure of consumer sentiment is the continued decline in perceived current financial conditions. For the first time in our survey, overall sentiment is optimistic about the country’s financial outlook in both the short-term and long-term.”

However, there was at least one exception.

“Unlike last year’s survey, there were significant differences across racial boundaries,” according to the center. “Households who identified themselves as black or African-American were more likely to indicate that they were doing better off financially this year than last year and were relatively more pessimistic than other racial groups regarding the country’s financial outlook.”

Consumers were also asked to indicate issues of greatest concern to their family, and each respondent was allowed to choose up to three. Consistent with previous years, the top four concerns were rising prices, affordable health care, income and crime. However, their rankings changed. In 2016, affordable health care, crime and income topped the list, in that order, among all racial groups.

“Affordable health care was mentioned by over 50 percent of the households, up from 33 percent last year,” according to the survey. “This is probably due to the uncertainty regarding whether or not the Affordable Care Act will be repealed and exactly what form the replacement policy would take.

“Crime is now second on the list with 50 percent of the households listing it as a top concern, a 72 percent increase from last year,” it continued. Forty-four percent of “households listed income as one of their top three concerns, up from 28 percent of households last year. While still one of the top four, the percentage of households listing concern over inflation (rising prices) has fallen from nearly 50 percent in each of the past two surveys to 36 percent in the most current one.”

Also on the list were: Quality education (19 percent), household debt (17 percent), job security (14 percent), personal/family issues (10 percent), paying for college (11 percent), and rising prices (36 percent).

At a recent Columbus Council meeting, Blair addressed the rise of crime as a concern among many families.

“That might be a little bit hard to understand given the recent downward trends that we’ve seen with crime rates in the city,” he said.

Using a web graphic, he compared 2008 to 2016, showing a drop in Part I crimes over the eight-year period, especially among such crimes as aggravated assault, burglary and motor vehicle thefts. And then he added 2011 and 2015 to the web to make one-year and five-year comparisons. And in all categories, there was a reduction in crime except one — and that’s murder.

“There was a spike in murders in 2016,” he said. “I think the murders in our local area are covered the most, they get the most press. Our murder rates in Columbus, they’re mentioned nationally as well. ... I think that’s what people make their perceptions on — those things that they see the most.”

The local business survey was used to to measure the expectations of local businesses for the upcoming year regarding local and national economic conditions, as well as the costs of doing business.

“Last year, with an overall index near 100, attitudes regarding overall local economic conditions in 2016 were neutral, neither optimistic nor pessimistic,” according to that report. “This was also true in the residential and commercial construction industries.

“However, now looking forward into 2017, businesses are strongly optimistic about these areas with optimists outweighing pessimists by more than 3 to 1,” it said. “Consistent with previous years, businesses express the most optimism for the local tourism industry to continue to grow; only 3 percent of businesses expected a decline in the number of visitors while over 60 percent expected that number to increase.”

This story was originally published February 26, 2017 at 4:34 PM with the headline "Columbus consumers optimistic about their economic future after 2016 election."