Virginians are feeling pessimistic about the economy

By Michael Pratt
VCU Center for Urban Development

Richmond, VA – Virginians are relatively pessimistic about business conditions in the nation and the commonwealth, according to a new poll conducted by Virginia Commonwealth University. However, they are reasonably optimistic about their own financial situation. The Commonwealth Poll was conducted Nov. 30-Dec. 6 with 793 adults in Virginia. The margin of error is +/- 4 percentage points.

Nearly one-half (47 percent) of the respondents believe the national economy will experience "bad times" over the next twelve months. Last February (the last time these questions were asked in the Commonwealth Poll and the month prior to the dating of the current recession), only 35 percent of the respondents held this view of the economy.

	December 2001 National Conditions
	Good Times	Bad Times	Same (vol.)
National business conditions next year	33%	47%	12%
National economy in 5 years	33%	48%	9%
Buying big items now	64%	23%	9%
	State Conditions
	Good Times	Bad Times	Same (vol.)
Virginia economy next year	37%	38%	14%
Finding a job in Virginia next year	31%	53%	9%
	Personal Finances
	Better	Worse	Same (vol.)
Personal finances over last year	44%	28%	27%
Personal finances next year	43%	10%	45%

Views on the Virginia economy show increased pessimism since last February. In this month’s poll, 38 percent of the respondents say they expect Virginia to experience "bad times" over the next twelve months. Moreover, 53 percent of the respondents think the next twelve months will be a bad time to be finding a job. Just nine months ago only 22 percent of the respondents felt the Virginia economy would experience "bad times" and only 30 percent felt it would be a "bad time" to find a job over the 12 months after that poll.

Residents in the state’s western (which includes Roanoke, Lynchburg and Danville) and northwestern (which includes Harrisonburg, Winchester and Charlottesville) regions are more pessimistic than other Virginians. Almost one-half (46 percent in the west and 45 percent in the northwest) of the residents in these regions say that Virginia will experience "bad times" over the next twelve months.

	Expectations on Virginia Economy Over the Next Year
	Good times	Bad times	Same (vol.)	Number of cases
Total	37%	38%	14%	793
Men	45%	32%	13%	384
Women	30%	43%	16%	409
White	39%	36%	13%	600
Black	32%	42%	28%	123
Less than 35K	31%	47%	10%	203
35-50K	37%	35%	18%	130
50-70K	38%	37%	13%	113
70K and over	48%	34%	8%	227
Northwest	33%	45%	10%	111
Northern VA	40%	37%	12%	223
West	32%	46%	11%	142
South Central	39%	32%	16%	149
Tidewater	39%	32%	21%	168
Republican	46%	28%	15%	249
Democrat	30%	47%	14%	228
Independent	39%	37%	12%	264

"It is unlikely that these results will surprise people," said Michael D. Pratt, Professor of Economics and a faculty member in the Center for Public Policy at Virginia Commonwealth University. "Whether we look to reports on business conditions in the nation, the commonwealth or most local economies, we see indications of recession."

Looking to the holiday season, the majority of the respondents said they will be spending more (18 percent) or about the same (45 percent) during this holiday season as they spent last year. Thirty-six percent of the respondents said they would be spending less.

Also, Internet shopping continues to increase. While 25 percent of the respondents said they ordered gifts using the Internet last year, 29 percent say they will use the Internet this year.

"While 18 percent of respondents said they would be spending more than they did last year, early indications from the retail sector may indicate that the season’s retail results will be determined by the 36 percent of respondents who indicated that they would be spending less," said Pratt.

The Commonwealth Poll
Nov. 30-Dec. 6, 2001
Number of respondents: 793

Q1. First, we are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?

                    December 2001     February 2001
Better off                 44%                 49%
Worse off                 28                     22
Same (vol.)             27                     28
No answer -

Q2. Now looking ahead, do you think that a year from now, you (and your family living there) will be better off financially, or worse off, or just about the same as now?

                               December 2001 February 2001
Better off                         43%                 41%
Worse off                         10                     8
Same (vol.)                     45                     51
No answer                     2                         1

Q3. Now turning to business conditions in the country as a whole, do you think that during the next twelve months we'll have good times financially, or bad times, or what?

                            December 2001 February 2001
Good times                 33%                 32%
Bad times                    47                     35
Same (vol.)                 12                      21
Other (vol.)                    8                      10
No answer                    1                         1

Q4. Looking ahead, which would you say is more likely-that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?

                                            December 2001 February 2001
Continuous good times          33%                 38%
Periods of unemployment        48                     37
Same (vol.)                               9                     11
Other (vol.)                                 8                     13
No answer                                 2                         1

Q5. About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?

                                    December 2001 February 2001
Good time to buy             64%                 61%
Bad time to buy                23                      21
Same (vol.)                        9                        15
No answer                        4                          3

Q6. What about just in Virginia? Do you think that during the next twelve months we'll have good times financially, or bad times, or what?

                        December 2001 February 2001
Good times             37%                 50%
Bad times                38                     22
Same (vol.)             14                     18
Other (vol.)             9                       10
No answer             2                         -

Q7. Thinking about jobs in Virginia, do you think the next twelve months will be a good time or bad time for finding a job in Virginia?

                    December 2001 February 2001
Good time         31%                 52%
Bad time             53                     30
Same (vol.)         9                       10
Other (vol.)         5                         8
No answer         1                         -

Q8.Thinking about the upcoming holidays, do you have a budget for your Christmas or holiday shopping this year?

                                        December 2001
Have a budget                     54%
Will spend what have to     41
Don’t buy gifts                     4
No Answer                             1

Q9. During this Christmas and holiday season, do you think you will spend more, less or about the same as last year?

                        December 2001
More                         18%
Less                             36
About the same         45

Q10. Did you order any of your gift purchases by computer using the Internet last Christmas?

                            December 2001
Yes, some                 25%
No, not any             73
No answer                 1

Q11. Have you ordered or do you plan to order any of your gift purchases using the Internet this Christmas?

                    December 2001
Yes, some             29%
No, not any         68
Don’t Know         3

Method of the VCU Commonwealth Poll
Nov. 30-Dec. 6., 2001
Number of respondents: 793

The Commonwealth Poll is an omnibus public opinion survey of Virginia residents. Each survey covers a variety of topics. The survey is conducted by telephone with a randomly-selected sample of adult Virginians.

Interviewing for The Commonwealth Poll was conducted by telephone from the facilities of the Survey and Evaluation Research Laboratory at Virginia Commonwealth University in Richmond. The interviewing is conducted by a staff of professionally trained, paid interviewers using computer-assisted telephone interviewing software.

The sample of telephone numbers was prepared by Genesys Sampling Systems of Ft. Washington, PA, and was designed so that all residential telephones, including new and unlisted numbers, had a known chance of inclusion. The cooperation rate for the survey was 44%. Using the CASRO response rate calculations, interviews were obtained with respondents in 38% of the known or assumed residential households in the sample.

The data were weighted to adjust for unequal probabilities of selection due to multiple telephone lines and multiple adults living in the household. In addition, the data were weighted on sex, race, age and region of residence to reflect the demographic composition of the Virginia adult population. Percentages reported in the text and tables are weighted, while the number of cases shown in the tables for various subgroups is the actual number of respondents.

Questions answered by the full sample of adults are subject to a sampling error of plus or minus approximately 4 percentage points at the 95 percent level of confidence. This means that in 95 out of 100 samples like the one used here, the results obtained should be no more than 4 percentage points above or below the figure that would be obtained by interviewing all adult Virginians with telephones. Where the answers of subgroups are reported, the sampling error would be higher. Because of nonresponse (refusals to participate, etc.), standard calculations of sampling error are apt to understate the actual extent to which survey results are at variance with the true population values. Surveys are also subject to errors from sources other than sampling. While every effort is made to identify such errors, they are often difficult or impossible to measure. Readers making use of the results are urged to be mindful of the limitations inherent in survey research.

Further information is available on request from the director of the Commonwealth Poll, Dr. Cary Funk, at (804) 827-1430 or clfunk@vcu.edu. More information on the Commonwealth Poll can be found at http://www.vcu.edu/commonwealthpoll/.