A report by the Conference Board released last week said consumer confidence hit a five-year high this month.
While the report may need to be taken with a small grain of salt -- after all, the last peak in consumer confidence came only months before the deepest part of the last recession -- consumer confidence still is considered one of the most accurate leading ,, indicators of where the economy is headed over the short term.
We checked consumer attitudes toward big-ticket purchases -- the kind theoretically most affected by consumers' worries about their job security and financial futures -- with people who sell big-ticket items such as new kitchens, new suits, new cars and new homes. The results were mixed.
Stuart Kitchens Inc.
We do business in Northern Virginia, the Washington suburbs and throughout Baltimore. In the Northern Virginia and Washington suburbs, business has been very strong. In Baltimore, it's a little lackluster, as far as the volume of people coming in.
It's OK, but it's not great. We have seen some resurgence in higher-end products. It's nothing chart-breaking. We're seeing more people go back to the higher-end kitchens. There was a drought on that. People are spending a little more, but it's very minimal.
Montgomery County and Northern Virginia have a lot more housing starts, so there's more activity there [part of Stuart's business is installing kitchens in new homes]. Basically it's new homes coming out of that area for us. People seem to shop more nowadays, from several different sources.
Cher-Chris Custom Homes Inc.
We're very active currently in new sales, and consumer confidence is part of the reason why. [Mortgage] rates have stabilized and we've even seen the downward trend. We're currently locking in about half a percent lower than we were six months ago, with two points less. I would say it was 9.5 or 9.25 with 2 points for long-term locks and now it's about 8.75 with no points. It has given confidence to the whole marketplace.
I'm not seeing in Maryland what the nation is seeing, that new home sales are off. I think our sales in Maryland are greater.
Charles Fenwick Sr.
Valley Motors Inc.
My obviously very parochial view is that it isn't parallel to what we see. I sell German and Japanese cars, and they are more affected than any other by what's left of the recession, largely because of the fall of the dollar against the yen and the Deutschemark. Our sales of Japanese cars are running only 80 percent what they were a year ago. This month -- April -- is much better than January, February and March. Those were very slow months.
We notice that the Washington market is much stronger than here. We exchange Mercedes with dealers there and they have had much stronger business. The dealers there are two to three times as active in new cars.
The last few months we see people taking longer to make up their minds. They look at it and they say they're not ready. It's harder than usual to get them to close a deal. Apparently it's not happening in Washington, but I think people in Baltimore still feel business isn't as strong as it could be. I guess they don't have the feeling of well-being.
But April has been a much better month, as much as 40 percent better than January, February and March. So maybe confidence is rising. A lot of it has happened just in the last 10 days.
Timothy F. Finley
Chairman and CEO
Jos. A. Bank Clothiers Inc.
I just don't see it. The apparel industry is terrible, so I'm a little biased. It's a tough quarter, tough year.
It's a difficult apparel economy but not necessarily a terrible economy. We're in a major transition emphasizing more casual, less expensive business clothing in addition to suits.
What happened at Christmastime, not to us but to others, is that if a guy had $300 he bought a TV and not a suit.
It's not fundamentally economic. There's a shakeout. There's a lot of things going on. The thing that would be driven by consumer confidence is the TV vs. the suit. That happened last fall, and that had an impact on us.
That's a positive argument for consumer confidence. The fact that someone bought a television set was probably an endorsement of consumer confidence. But we recovered, suitwise. February and March were slow but April picked up. I don't know who can figure it out.