The COVID-19 pandemic has weakened southwest Pennsylvania’s confidence in the local and national economies, employment, and personal finances. Even if sentiment has risen in the past two months, the outlook for most consumers remains grim.
Confidence has soared since March when consumers first learned what life is like during a global pandemic. This is based on surveys by the Allegheny Community Development Conference and Schmidt Market Research, which cover 10 counties in southwestern Pennsylvania.
Seven months after the pandemic, they saw abrupt changes at work and home, the closings of churches, businesses and public places, widespread layoffs, the optimism of loose social restrictions, the reopening of more businesses, and the disappointment in a resurgence of COVID infections and the realization that the end of the turbulence is not yet in sight.
It was a roller coaster ride that could gnaw at consumer sentiment in the months to come.
“I think there will be less optimism,” said Vera Krekanova, chief strategy and research officer at the Allegheny Conference. “One day the news is positive, the next day it is negative. We haven’t seen any spikes in confidence in announcements like the reopening of schools or that we might get close to a vaccine. People feel that this will take a long time. They are less willing to believe that things will get better soon. It’s been seven months. Everyone is fed up and people will be less optimistic just because of that. “
For now an upswing
Consumers show that any level of consumer confidence was higher in mid-September than in mid-July. Some of the largest increases were seen among consumers, who viewed the regional and national economies and business conditions positively.
Nevertheless, consumer confidence remains weak overall.
Only 19 percent of consumers see their employment prospects as good. Less than 14 percent feel comfortable about the terms and conditions. Only 16 percent have a positive view of the regional economy and only 23 percent of the national economy.
Even when confidence was highest during the pandemic, less than half of consumers felt good about the regional economy and barely half had positive feelings about their own financial situation.
Employment concerns increased in May. Since then, people have felt much better about their personal finances than they did about their job prospects. More than 4 in 5 consumers are worried about employment. “There is a lot of fear among people, including those who have work,” said Krekanova.
Consumer confidence has come a tough journey of peaks and valleys marked by home orders, business closings, soaring infection rates and soaring deaths, economic reopening and news of vaccines in development that could end the international nightmare.
Confidence in the regional economy only slowly soured at the beginning of the pandemic. At the end of March, nearly 48 percent of consumers felt comfortable about local economic conditions, while only 16.5 percent felt the same about national conditions. State and federal pandemic aid funds to support businesses and the unemployed dampened the first blow.
However, confidence fell sharply in late April and into May as more businesses closed, more jobs were lost, and social distancing became a term everyone knew. It recovered briefly in June when the region returned to “green” outbreak control and summer came, and then fell to its lowest levels as infections spiked before they began to recover.
Many questions concern the prospect of a further recovery in consumer confidence. Will there be another flare-up if COVID collides with the flu season? Will another federal stimulus package be passed to support difficult companies and families? Will consumers spend more than what they really need?
Overall, consumer sentiment is weak. But it’s stable when compared to feelings about employment and personal finances. Almost 35 percent of consumers felt good about spending in September, about as many as in March. Your spending plans are aimed at buying durable goods such as a car over the next six months. “There aren’t many services that money can be spent on,” said Krekanova. “Even if you have money to spend on events, restaurants, arts, and culture, they are not fully functional.”
Most consumers are willing to spend money getting out of town and taking a break. The spending plans of 65 percent of local consumers include a road trip.