DeVries, Marvin G.

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Seidman School Management MemoVolume 4 | Issue 1 Article 210-1-1983Consumer Optimism Grows Despite Interest RatesConcernsMarvin G. DeVriesGrand Valley State UniversityFollow this and additional works at: http://scholarworks.gvsu.edu/ssmmThis Article is brought to you for free and open access by the Seidman College of Business at ScholarWorks@GVSU. It has been accepted for inclusionin Seidman School Management Memo by an authorized administrator of ScholarWorks@GVSU. For more information, please contactscholarworks@gvsu.edu.Recommended CitationDeVries, Marvin G. (1983) "Consumer Optimism Grows Despite Interest Rates Concerns," Seidman School Management Memo: Vol.4: Iss. 1, Article 2.Available at: http://scholarworks.gvsu.edu/ssmm/vol4/iss1/2Vol. 4, No.1, Fall 1983 F. E. Seidman School of Business Seidman School Celebrates Its Tenth Birthday A blending of regional and national perspectives has characterized the first decade of the Seidman School of Busi­ness, according to its dean, Marvin DeVries. Before the school was estab­lished, in 1973, Dean DeVries spent ten weeks visiting twelve business schools throughout the nation, ranging from the University of California at Irvine to Tu­lane and Vanderbilt, to study their busi­ness programs. In addition, DeVries and other representatives of Grand Valley met with business and community lead­ers from throughout west Michigan to talk about the potential for a graduate program illl business and to exchange .;as about the kind of program that uld best serve the needs of the area. Statistics on Seidman graduates offer evidence that the school has indeed Some of the general characteristics of the student population of Seidman have changed little over the past decade, however. The average student age is from 30 to 33 years, and 95 percent of the students at Seidman are employed in full-time jobs, pursuing their studies on a part-time basis through evening courses. Sixty percent do not have un­dergraduate degrees in business; they are engineers, educators, and others who have moved into management within their organizations or who are seeking to make such a move, says DeVries. Probably the most Significant change in the student population is reflected in the educational needs expressed by stu­dents. Not surprisingly, they want to know more about computers. As a re­suIt, the use of computers is being inte­grated into courses throughout the curriculum, while new, in-depth com­puter courses designed to meet the needs of business students are being developed. A related development, DeVries says, is a growing interest in human relations. "With the increasing use of computers and the rapid pace of technological de­velopment, students are more and more interested in where individuals fit in or­ganizations. As a result, we are strength­ening our offerings in the personnel and labor relations areas." Probably the biggest surprise in Seid­man's first ten years, according to De­Vries, has been the rapid growth of the school. When it opened in 1973, the Continued on page 8 served the region. More than 65 percent of the graduates remain in west Michigan after they complete their degrees, De­Vries says. At the same time, he points out that as local firms strengthen their ties with national organizational struc­tures, more and more alumni are moving into positions in other parts of the country. Ties with national organizations are also reflected in concerns brought into the classroom by Seidman students, ac­cording to DeVries. 'The issues they are concerned with are increasingly those of larger corporate structures rather than just small enterprises," he says. Inside The Recovery Continues ........... 2 New Seidman Professor ............ 3 Faculty and Staff Notes ............ 3 The Grand Rapids Economic Index .. 4 Positioning the Retail Enterprise For the 80's and Beyond ..... . .... 6 GRAND VALlEY~ STATE Consumer Optimism Grows Despite Interest Rates Concerns By Marvin G. DeVries Grand Rapids area consumers con­tinue to show more optimism about the condition of the economy and their own household financial situation despite some concerns about interest rates. The Grand Rapids area index of consumer sentiment stands at 98.4 for the month of July compared with 91.6 three months ago and 76.0 six months ago. The findings are based on a telephone survey of 400 area consumers selected at random to represent the entire area population. Findings are accurate to within four percentage points. The sur­vey is patterned after the University of Michigan's nationaJ survey of consumer sentiment, which has closely monitored consumer attitudes for over thirty years. Recent results from the Michigan na­tional survey have shown continued im­provements in attitudes nationally, just as they have locally. The national index of consumer sentiment has been placed at 93.9 for July, up from 89.1 three months ago and 70.4 six months ago. These findings continue the upward trend in consumer attitudes that began in November of 1981. However, the most dramatic increases both locally and nationally have occurred since the be­ginning of 1983. According to the results of the current survey, four of the five components of the index registered improvements. Area respondents felt their current and future personal financial situations have been and will be improved. They also indi­cated that business conditions nationally would be good during the next twelve months but registered some slight con­cern about conditions during the next five years. Consumers continue to be­lieve that now is a good time to buy a major household item. Continued on page 5 .f<>nsumer Optimism Grows Continued/rom page 1 The most dramatic change in con­sumer attitudes since the last survey is in their concern about interest rates. Among all families in the Grand Rapids area, 51 percent expected interest rates to in­crease during the next twelve months, up from 17 percent in April and 20 per­cent in January. The proportion of fami­lies that expected interest rates to climb was 15 percent in July, down from 37 percent in April and 41 percent in Janu­ary. These results are consistent with the national survey for July, in which 40 per­cent expected interest rates to increase, up from 21 percent in April and in which 20 percent expected interest rates to de­cline, down from 34 percent in April. Consumer buying attitudes still re­main high. Among all consumers, 59 percent said now is a good time to buy a house, up slightly from 56 percent in April but up substantially from 42 per­cent in January. Nationally, there was a slightly diffe,rent pattern, with 59 percent indicating that now is a good time to buy _ house, down from 61 percent in April ut up from 44 percent in January. When asked about the automobile market, 68 percent of the local con­sumers indicated now was a good time to buy a car, up from 63 percent in April and 60 percent in January, while 19 per­cent said it was a bad time to buy a car, down from 24 percent in April and 29 percent in January. Across the United States, 65 percent said now was a good time to buy a car, down slightly from 66 percent in April, but up Significantly from 51 percent in January. The percent who indicated now was a bad time to buy a car was 27 percent in July, down from 29 percent in April and 41 percent in January. Grand Rapids families reported, on balance, more favorable evaluations of their personal financial situation than they did previously. Among the survey respondents, 34 percent said their finan­cial situation is better now than a year ago, up from 28 percent in April and 23 percent in January. At the same time, 31 percent indicated the situation was worse, Aflown from 34 percent in April and 42 ~ercent in January. Nationally, the re­sults are similar. Grand Rapids consumers were quite INDEX OF CONSUMER SENTIMENT GRAND RAPIDS UNITED 120] I:C, 110 ,~ 100 "I 90 80 ' 80 7070 6060 50L-· '50 DAD A 0 AD 1982 1983 1984 during the next twelve months. When questioned, 46 percent of the con­sumers thought their situation would be improved, up from 32 percent in April and 29 percent in January. Nationally, consumers were not quite so optimistic. Only 35 percent thought they would be better off, down from 40 percent in April but up from 34 percent in January. Area residents were quite optimistic about the national economy. Almost eight out of ten consumers felt business conditions were better now than a year ago, up from 64 percent in April and 22 percent in January. At the same time, 61 percent thought conditions would be better a year from now, which is about the same percentage as in April, but up from 49 percent in January. When asked about business conditions during the next five years, 43 percent thought they would be good, but that was down from 45 percent in April. Nationally, the figure was 39 percent for both July and April. Survey respondents gave the govern­ment reasonably good marks on eco­nomic policy, with 29 percent saying the government is doing a good job, 51 per­cent a fair job, and only 19 percent a poor job. However, they are concerned about prices since 61 percent believe prices wUl increase during the next year, cent in January. When asked to think about prices over the next five years, 77 percent thought prices would increase, about the same percentage as in April and January. Consumers are also shOWing more optimism about the local economy. When asked to compare this area with the national economy, 30 percent indi­cated it was in better shape, up from 23 percent in April and 19 percent in Janu­ary. Although 37 percent felt it was in worse shape, this figure was down from 44 percent in April and 50 percent in January. Consumers particularly felt the local economy had improved dramati­cally, with 58 percent reporting the economy was in better shape than a year ago, up from 35 percent in April and only 9 percent in January. Only 13 per­cent felt the economy was in worse shape. The survey of consumer attitudes is conducted quarterly as part of the Seid­man School's continuing study of local economic activity. Insight Marketing, Inc., a Grand Rapids based market research firm, coordinates the interviews. Dr. Marvin G. DeVries is the Dean 0/ the Seidman School 0/Business. MeMO The Seidman School Management Memo is published twice a year, in the spring and fall, and is sent to all contributors to and friends of the Seidman School of Busi­ness. Gifts from these sources enable the Seidman School to sponsor activities and programs designed to increase under­standing of our economic system, facilitate exchanges of ideas between students, faculty, and businessmen, and support faculty research and professional develop­ment and, in general, enrich the business and academic communities. Persons in­terested in more information about the Memo or the published articles should contact Dr. Marvin G. DeVries, Dean, F. E. Seidman School of BUSiness, Lake Huron Hall, Grand Valley State, Allendale, Mich­igan, 49401. Telephone 616-895-3271. optimistic about their financial situation up from 52 percent in April and 47 per­5 

Consumer Optimism Grows Despite Interest Rates Concerns

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Consumer Optimism Grows Despite Interest Rates Concerns

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