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Survey: Consumers generally optimistic, but still cautious

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DESPITE the generally positive economic prospects in the next 12 months, most respondents of the University of Guam-Pacific Center for Economic Initiatives (PCEI) Consumer Confidence Survey said they continue “to be cautious spenders on big-ticket items, especially with regard to purchases of real estate or vehicles.”

Moreover, going on a vacation in the next 12 months appeared not to be a high priority for many consumers who participated in the survey.

A higher percentage of respondents viewed the local business environment positively compared to regional or global business environments.

As in the previous survey in November-December 2011, the pattern continues to show that respondents are more upbeat in their economic prospects for Guam in the next 12 months than they are for the region or the world.

Most survey participants also assessed their economic situation in the past 12 months as neutral or “same as last year’s.” This is noteworthy in light of negative developments affecting tourism and the overall economy around the time of the survey, the report states.

These local and regional developments which occurred during the survey period include the Tumon stabbing incident in February and the North Korean nuclear threats in April.

Exchange rate

In addition, the report noted concerns relating to the strengthening of the U.S. dollar against the Japanese yen since September 2012, which could slow down tourism from Japan.

“More likely than not, these negative economic developments around the time of the survey dampened respondents’ assessment of the current local situation. In other words, in the absence of these developments, the respondents’ would have been more optimistic in their assessment of the current local situation,” the report states.

Effort

Between Feb. 23 and April 12 this year, a total of 368 respondents were asked to assess their experience in the past 12 months with the local business conditions, looking at factors such as income and employment, as well as the regional and global economy.

The respondents were also asked to look 12 months forward and share their prospects, as well as their plans to purchase big-ticket items and to vacation.

Maria Claret Ruane, Ph.D., resident development economist for PCEI and economics professor at the School of Business and Public Administration, drafted the report.

The current Consumer Confidence Survey, according to a news release, represents PCEI’s continued efforts “to contribute to the availability of reliable, current, and relevant indicators of business and economic conditions on Guam.”

Moreover, the surveys generate a data base/time series that will allow for more in-depth analysis by stakeholders of the Guam economy, namely, local and federal policymakers, local and off-island businesses and the local community.

“As a land-grant university, UOG is pleased to provide the results of the latest Consumer Confidence Survey relating to Guam’s economy as a continual engagement outcome for planners and policy decision-makers,” said UOG interim Senior Vice President Anita Borja Enriquez, D.B.A., who also serves as PCEI’s director.

Annette Taijeron Santos, D.B.A., acting dean of the School of Business and Public Administration, considers this report “a great example of UOG’s role in transferring and applying university-based knowledge for practical benefits contributing to the island’s economic prosperity.”

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