Latest Arizona Business Index Released, Consumer Economic Optimism Grows

The Greater Phoenix Chamber recently released the Q2 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.

“It’s encouraging to see a growing consumer sentiment and economic optimism,” said Todd Sanders, president and CEO, Greater Phoenix Chamber. “Both Arizona and national future confidence share the same trajectory. With a 10.5 percent increase from Q1 in optimism about business conditions in the year ahead, I am confident in Arizona’s economic recovery. We believe Arizona is positioned to rebound well from the pandemic.”

Key Highlights on all categories are below:

Consumer Sentiment

• Growing Confidence in 2021 Q2
  • ABI-CS increased by 2.81 points from 2020 Q4 to 2021 Q1 but increased by 7.40 points from Q1 to Q2 2021. This point increase was more than double in the last quarter.
  • April 2021 saw the ABI-CS future index reach its 12-month high at 96.6 points.

• Consumers are more optimistic about the business condition in the next five years
  • Q2 saw a 10.5 percentage point growth over Q1 in optimism about business conditions in the year ahead
  • The share of people expecting good business conditions for the next 5 years increased 3.9 percentage points from Q1 to Q2

• Gen X’s confidence grew the most out of all generational groups. Though Gen X saw the largest quarterly increase, Gen Z is still the most confident generation, overall (91.3 in Q2).
• Consumers in the US as a whole are more optimistic about their current situation than they are in Arizona
  • Even though the US and Arizona trended in similar directions since February 2021, they split in June 2021, with current national sentiment increasing by 1.2 points while sentiment in Arizona decreased by 2.9 points.

Housing Index

• Even though more consumers think it’s a bad time to purchase a home, there was an increase in consumer intent to purchase a new home.
• The housing index reached a new 6-month low in June (119.6 points).
• Changes in housing confidence varies sharply by age. The confidence of consumers under 54 years old increased over the past 12 months while confidence among consumers aged 65+ decreased by 74.2 points since October 2020.
• Urban residents are most confident in the current housing market. 42 percent of Urban residents consider now a good time to purchase a new home while one-third or less of residents living in suburban and rural areas thought it was a good time to buy a new home.

Automobile Index

• The Arizona Automobile Index reached a new 12-month high in April and new quarterly high in Q2.
• Consumers who suggested they will purchase a new vehicle say price and comfort are key factors in their purchase decision. Gas mileage was important to 51 percent of low-income consumers and 58 percent of mid-income consumers.

Economic Optimism

• 8.5 percent more consumers expect interest rates to rise, compared to Q1.
• In June, 78 percent of consumers are expecting prices to rise, and 63 percent are expecting interest rates to rise. This represents a new 12-month high for both measures.
• Conservatives, Silent/Boomers, and Republicans are the least optimistic about the economy.  Republican economic confidence dropped to 65.2 points after November 2020 and hit a 12-month low of 59.3 points in May.

Job Satisfaction

• More consumers were less satisfied with their job and felt more insecure.

Credit Card Debt Index

• Credit card debt index dropped 1.53 points in the last quarter, hitting a new 12-month low in April at 96.6 points.
• 3.3 percent more consumers were expecting their credit card debt to increase in Q2 as compared to Q1, but there was still a significant difference this quarter in those expecting debt to decrease versus increase (30% decrease -10% increase).

COVID-19/Vaccine Concerns

• Consumers in Arizona are more optimistic about COVID-19 in Q2. A net of 6 percent more consumers felt the situation will be better in the next 30 days.
• Going to a restaurant has become the most popular activity in Q2 with 47 percent of consumers feeling comfortable. Only 34 percent said this in Q1.

“As Arizona continues to emerge from the pandemic, leaders and decision makers in the business community would be wise to pay close attention to the movement of the perceptions, expectations, and key factors in purchasing decisions of Arizonans,” said Mike Noble, OHPI Chief of Research.

For information on and to obtain access to the Arizona Business Index, click here.

Methodology: The survey was completed by OH Predictive Insights from April 1 to June 22, 2021 from an Arizona general population. The data applied post-stratification on age, gender, region, ethnicity, and education level that reflects latest Census data. The sample size was 1,800 completed surveys, with a MOE of ± 2.31%.

The Arizona Business Index ™ (ABI™) is a barometer of the health of the Arizona economy from the perspective of the Arizona consumer. This extensive statewide consumer sentiment survey provides an accurate pulse on the key indicators that drive the economy and delivers expert insight into consumer confidence to help aid in decision making. The index is based on consumers’ perceptions of business conditions, personal finances, and buying conditions. Follow ABI on Twitter @AZBusinessIndex

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.

As a nonpartisan market research, predictive analytics, and public opinion polling firm, Phoenix-based OH Predictive Insights provides accurate polling, focus groups, data analytics, and advanced targeted marketing to political and non-political clients alike. With leading professionals in the advertising, communication, polling, and political arenas, OH Predictive Insights will service political and non-political clients looking to improve their footing on key stakeholders and consumers.