If you’ve feel a little more like going on a spending spree over the last few months, you’re not alone. Consumer confidence is going strong at the moment, reaching its highest level since January 2008, according to recent results from The Conference Board’s consumer confidence index, which increased to 85.2 in June.
Manhattanville College School of Business Program Director Bozidar Jovanovic
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“Increased consumer confidence is indicative of the post-2008 recovery gaining momentum. It has been slow, but we are seeing profits grow and the increased ratio of job openings versus job seekers,” notes Bozidar Jovanovic, program director, Manhattanville College School of Business. The result? “Consumers will feel sufficiently confident to undertake major purchases such as homes and durable goods,” Jovanovic says.
The important question, of course, is whether this boost in consumer confidence has translated (or will translate soon) into increased profits for Westchester companies. According to Jovanovic, the real estate sector is one area that should see immediate benefit, something Michele Flood, associate real estate broker affiliated with the Coldwell Banker Residential Brokerage office in Rye/Harrison, agrees with—mostly. “Generally speaking, consumers seem more confident in purchasing real estate than last year. Investors are out there in greater numbers than ever before and have deep pockets,” Flood says. But, the real estate picture is mixed, she adds. “The number of homes sold to date this year [in the Rye/Harrison area] is down about 15 percent from the same period last year. Median prices have increased approximately 18 percent, reflecting both improved prices and greater sales of higher priced homes. The inventory on the market remains at approximately 10-11 months supply,” Flood explains.
And the picture is also mixed when it comes to durable goods like furniture, finds Roy Estrow, owner of Country Willow, a high-end home furnishings retailer in Bedford Hills. Estrow reports that luxury consumers do indeed seem confident, but that shoppers at a lower price point are still hesitant to spend. “We used to get a wider range of consumers. Now, our volume of traffic is down but the quality of the consumer is up—we have fewer people coming in to buy a coffee table, and more coming in to buy an entire room,” he explains. He’s also seen an uptick in spending from new homeowners (“They come in armed with all their floor plans and measurements,” he says), and what he believes are purchases from pent-up demand. “People are buying faster and shopping less; they haven’t bought for a while, because they haven’t felt confident, but now they do,” Estrow says.
Retail shoppers at the Cross County Shopping Center are also loosening up the purse strings, finds Liz Pollack, Cross County’s senior manager, marketing. “We can see the results of increased consumer confidence in the demand for more retail and dining options,” Pollack says, pointing to the recent additions of fashion retailer Zara, as well as four new eateries and restaurants. The Yonkers shopping center is also experiencing increased traffic during the week and weekend—though its hard to pinpoint if that is due to consumer confidence or the normally busy summer season. Either way, Pollack notes, “we do anticipate to continue to grow our shopper base.”
The mostly good economic vibes that come with increased consumer confidence are likely to stick around, according to Manhattanville’s Jovanovic. “This trend will continue as the [economy’s] expansion is far from over, there are no signs of massive credit creation, nor inventory inflation at least for another one to two years,” he says.