Consumer Confidence Falls, Montana Survey Says

By Robert Struckman, 12-18-08

If you’re interested in consumer behavior, here’s something you’ll want to know: Montanans are gloomier about the economy than any time in the last 15 years, a new University of Montana report says.

“Consumer confidence indexes are exactly what they say they are,” explained Patrick Barkey of the UM’s Bureau of Business and Economic Research. “They ask people how they feel.”

The telephone survey used to make the Montana Index of Consumer Sentiment uses five basic questions about individual situations and perceptions about the state and national economies, which are put to a representative sampling of 424 adults across the state. The survey is comparable to other indexes, like the University of Michigan’s U.S. index.

The index figure for the most recent survey, for November/December, was 91, having plunged from last year’s score of 113. The index peaked in the fall of 2007 at 131. Montana’s baseline—100 points—was established in March, 1982, while the western part of the state was in the grips of the wood products recession.

The startlingly low consumer confidence reflects the recent nasty turn in the state and national economies.

“We’ve had a recession. It’s been happening all year,” Barkey said. “As I see it, it was your garden variety recession until September or October.”

A lot of things that were going right for Montana changed, he explained. Commodity prices crashed. Energy investments are being rethought. Tourism seems to be down.

“We’re much less optimistic (about Montana’s economic prospects for 2009). That goes without saying. I’m starting to be pessimistic,” he said.

The U.S consumer sentiment index was 59.1 in December 2008, down from 75.5 in December 2007, revealing a near all-time low for the nation in their feelings toward the economy. Each index provides another data point to measure and understand Montana’s economy.