LISA SCHEID | Business Trends ReporterFollowing a plummet to near-2008 recession levels in March, Lancaster County’s consumer sentiment index score soared 17 points in May.
Local consumers said a thriving local business environment, low unemployment and ease of finding a job led to a positive outlook, the highest score in 22 months. The May index score was 83.1, according to the survey conducted the first week in May by the Economic Development Company of Lancaster County’s Center for Regional Analysis with the help of LNP | LancasterOnline. The local measure is currently tallied every other month.
The latest local index score highlights an up-and-down trend that began in July 2022.
Lancaster County’s optimistic sentiment registered in contrast to a dimmer view nationally. The national consumer sentiment saw a 4.3-point drop over the same time frame (March 2023 to May 2023), according to the University of Michigan's latest Survey of Consumers polling.
The divergence of the two polls coupled with the up-down nature of Lancaster’s polling, underscores a sense of economic uncertainty, according to the EDC.
Consumer confidence is important because consumer spending is the largest driver of economic activity. And the consumer confidence measure is one of few economic indicators that provide nearly real-time insight into spending as indicators like unemployment and retail spending can lag a month.
Local developments boost outlook
Locally, the uptick in consumer attitudes is largely attributable to a positive shift in respondents’ outlook on where the economy is heading.
In response to a survey question about business conditions in the next five years, a 40-year-old man from the Landisville area said he expected good times. He could have picked bad times or a mix of good and bad. The survey does not collect names and allows responders to elaborate on their opinion.
“There is a lot of development in Lancaster city which will lead to increased economic production and also jobs,” he wrote. “Lancaster is an up and coming city with a vibrant entertainment district. The county is conveniently located around four major cities which will help with housing costs.”
Inflation, however, continues to remain in the forefront of Lancaster County residents’ minds.
A 31-year-old woman from Lancaster city responded to a survey question that she expects the financial situation to get better in the next year, but she is worried about inflation.
“There will hopefully be improvements but inflation is still driving people out of the market,” she responded.
Although May's polling saw respondents expressing relief in the wake of a 10-month decline in the inflation rate, many respondents noted that the latest inflation rate measure in April of 4.9% – more than double the Federal Reserve’s target of 2% – continues to cause them financial difficulties.
Respondents noted a thriving local business environment as a contributing factor to their heightened optimism. At the same time, the growing number of economists forecasting an impending recession weighed on many respondents’ minds.
Accounting for the recent dip in national consumer sentiment, Joanne Hsu, director of the Survey of Consumers at the University of Michigan, said in a written statement that “worries about the economy escalated in May alongside the proliferation of negative news about the economy, including the debt crisis standoff.”
While local respondents shared frustration with national economic policy, the ongoing federal debt ceiling crisis was notably absent as only 2% of survey responses contained any mention of national debt policy, the EDC said.
The online survey was supplemented by a survey from Schlesinger Group, a marketing research company based in New Jersey. The local survey is modeled after University of Michigan’s monthly measure to allow for comparison to national results.
