Huntington Bank's index: Consumer optimism increased
As part of the survey, respondents also reported holiday spending plans that are essentially on par with last year's.
Increasing numbers of consumers in traditional manufacturing states believe the economy is getting better, likely a result of increasing real estate prices - and plan to spend on vacations, home improvements, and cars.
Forty-six percent of respondents feel confident that the economy in their local area is better now than one year ago, compared to 39% last year. Fifty-eight percent of respondents believe the local real estate market is improving, a a 12 percentage point increase over last year's survey.
Respondents rank vacations as the top category for discretionary cash spending (59%), with three in four (76 percent) Midwest consumers planning vacations away from home in 2014, about the same as 2013. The average budget for 2014 is $3,200. Half of Midwest consumers plan 2014 home improvement projects, roughly the same in 2013, and of those 55 percent plan to pay in cash.
New car purchases will overtake used car purchases this year, with 55% of respondents (up from 52% last year) planning to buy a car looking for a new model, and 30% of respondents (down from 32% last year) planning to buy used.
"Huntington Bank launched its Midwest Economic Index to give our business and consumer customers a regional economic snapshot to inform planning for the holiday season and year ahead. The survey confirms that the economy continues to recover in our Midwestern region, and underscores what we are seeing in our local real estate markets, where home values and sales have increased this year," said George Mokrzan, Huntington's director of economics.
Midwest consumers indicate they expect to spend $940 this holiday season compared to $959 last year. Approximately half (46 percent) indicate that holiday purchases will be made using cash from savings, with 39 percent saying they will use a credit card. The majority plan to make most holiday purchases at a big box store (61 percent), 20 percent indicate most purchases will be at locally owned small businesses. ■