Americans Increasingly Dour on Economic Recovery, According to AlixPartners Survey
63% feel “not good” or “bad” about the direction of the economy; 61% do not see economic recovery until 2014, if ever
NEW YORK (June 3 , 2011) – Despite some recent signs of economic recovery, 63% of Americans continue to feel “not good” or “bad” about the state of the U.S. economy, representing a significant increase from May 2010 when only 49% of Americans felt this gloomy. That’s according to a survey released today by AlixPartners LLP, the global business-advisory firm.
“We’re seeing a lot of mixed signals on the economy, both from consumers and businesses,” said Fred Crawford, CEO of AlixPartners. “There is a lot of positive out there, but it’s being overshadowed by a stubborn, pervasive feeling of uncertainty among Americans and businesses, which has only been compounded by recent global unrest.”
In each of five surveys on the economy since February 2009, AlixPartners has learned that the majority of Americans believe it will be about three years before their pre-recession lifestyles –including pre-recession spending – returns (See graphic below). In this most recent poll, AlixPartners found that 61% of Americans do not expect to return to their respective pre-recession lifestyles until the spring of 2014, if ever (with 10% saying never).
“Despite the recent uptick in consumer spending, we continue to find that Americans are only cautiously optimistic, if that,” said Crawford. “Americans continue to push their expectations for returning to a pre-recession ‘normal’ further and further into the future – close enough for comfort, but far enough away to seem realistic. But as that happens, more and more it seems that normal is actually where we are right now. ”
The survey found that Americans have not been encouraged by the nation’s slowly improving employment picture, as 60% of those surveyed said they would not consider it a full economic recovery until the unemployment rate is lower. Additionally, 62% of Americans polled expect no improvement in their personal financial situations in the next year, 11% are unsure and only 27% expect improvement.
Americans do not seem to be convinced yet by positive economic news, which may, in part, be due to their more recent concerns about oil prices. Twenty-eight percent of those surveyed cited fuel costs as their No. 1 concern related to their personal economic situation, an increase of 23 percentage points in six months. With fuel costs jumping to the top spot from the bottom rung on the list of concerns, personal debt (No. 1 on all previous, similar AlixPartners surveys) fell to No. 2, at 13%, and rising healthcare costs and possible job loss/cutbacks rounded out the top four concerns at 11% and 10%, respectively.
The survey found that Americans overwhelmingly expect to delay by at least 12 months major purchases and expenditures such as on new cars, home repairs and vacations.
“Companies selling to Americans should be preparing for a long, bumpy ride,” said Peter Fitzsimmons, president of North America at AlixPartners. “Without a doubt, rising fuel prices, a shaky job market and lingering debt service are leaving many Americans worried about the future and cautious with their finances and expenditures. As a result, companies today need to find creative paths to growth, ones quite different from those of the past.
“Since the recession,” continued Fitzsimmons, “the way that companies are looking at growth has fundamentally changed, as businesses today are hesitant to invest capital and slow to hire new employees. Increasingly, they are looking at growth primarily through acquisitions. Companies are not yet ready to address the type of organic growth that relies more heavily on Americans’ willingness to spend.”
“It’s a vicious cycle,” said Crawford. “Americans need to see a significant decrease in unemployment to feel confident in the economic recovery, but companies are waiting to see increased demand for their products and services before they begin hiring and making job-creating capital expenditures.”
Despite the need for businesses to bolster economic growth, of those surveyed who cited negative feelings about direction of the economy, most (nearly 40%) view the federal government’s economic policies as the single-biggest reason for their negative feelings. Perhaps reflecting those concerns, 41% of those polled said they would consider voting for a third-party candidate in the 2012 election if the President and Congress are unsuccessful in promoting economic growth.
About the Survey
The AlixPartners U.S. Economic Outlook Survey was conducted April 14-15, 2011 among 1,000 U.S. adults. Americans were asked to provide feedback on the cur...Continued...