GALLUP NEWS SERVICE
Recent economic data suggest that the U.S. economy has been a lot stronger during early 2002 than many people expected. New Gallup/UBS "Index of Investor Optimism" data for March add support to all of the good economic news. More importantly, the March surge in the "Index of Investor Optimism – U.S." predicts a good start to the second quarter for the U.S. economy while the upturn in the "Index of Investor Optimism - EU5" implies an improvement in the European economy.
In this context, it is not surprising that two out of three U.S. investors (65%) say that the recession has hit bottom in the United States On the other hand, both indices have shown a lot of volatility in early 2002. After surging in January, both indices fell sharply in February before surging again in March. According to investors, there are some significant underlying concerns that are not only troubling them, but also adding an element of fragility to current U.S. investor optimism. (See "related items" below)
U.S. Investor Optimism Surges in March
New Gallup/UBS "Index of Investor Optimism -- U.S." poll data (March 1-14) show overall U.S. investor optimism surged to 121 in March -- up 29 points from February's reading of 92. It is also up from its January level of 115 and is now at its highest level in more than a year. The U.S. Index is far higher than it was in March 2001 when it stood at 82, but remains substantially below where it was in March of 2000 when it stood at 150.
The biggest jump in the U.S. Index came in the economic dimension, which rose from 23 in February to 41 in March 2002. This is the highest level for this dimension of the U.S. Index since October 2000, when it stood at 44. The personal dimension of the U.S. Index increased to 80 in March -up 11 points – placing it below its January 2002 level when it reached 85.
EU5 Investor Optimism Also Increases in March
During October 2001, an "Index of Investor Optimism – EU5" baseline survey was conducted in five countries in Europe: France, Germany, Great Britain, Italy and Spain. As a result of this survey, the baseline for the "Index of Investor Optimism -- EU5" was established at 4. The personal dimension was established at 33 and the economic dimension was established at -29.
In January 2002, the "Index of Investor Optimism -- EU5" increased 36 points from its October 2001 level, reaching 40. In February, the EU5 Index declined to 20 before increasing once more to 30 in March. As a result, the EU5 Index is now far above its low of October 2001, but remains somewhat below its January 2002 high.
As was the case in the U.S., the biggest part of the increase in the European Index came in the economic dimension, which increased from -27 in February to –10 in March 2002. The personal dimension of the EU5 Index increased to 42 in March -- up 5 points from its February 2002 level of 37.
THE INDEX OF INVESTOR OPTIMISM - EU5
|
OVERALL |
PERSONAL |
ECONOMIC |
|
|
02 Mar |
32 |
42 |
-10 |
|
02 Feb |
20 |
37 |
-17 |
|
02 Jan |
40 |
44 |
-4 |
|
01 Oct |
4 |
33 |
-29 |
More U.S. Investors Say It Is a Good Time to Invest
For most of the past several years, two-thirds or more of American investors have said that it is a good time to invest. Neither the events of Sept. 11 nor the non-existent investment returns of 2001 have changed that strongly held investor position.
In March 2002, seven out of 10 U.S. investors (71%) said that now is a good time to invest. This was up somewhat from February when 67% of U.S. investors said it was a good time to invest but about the same percentage as in January, when 72% of U.S. investors said it was a good time to invest.
Probably reflecting the much lower level of investor optimism in Europe, less than half (44%) of European investors said that now was a good time to invest in the financial markets. Also, despite the January and March surges in European investor optimism, this percentage remains at about the same level (46%) it was at in October 2001.
Survey Methods
Results for the Gallup/UBS "Index of Investor Optimism – U.S." are based on telephone interviews with a randomly selected U.S. sample of 1,004 adult investors, 18 years and older, with at least $10,000 of investable assets, conducted March 1-14, 2002. Results for the Gallup/UBS "Index of Investor Optimism – EU5" are based on randomly selected samples of approximately 200 investors each in France, Germany, Great Britain, Italy, and Spain conducted March 1-15, 2002.
For results based on this sample, one can say with 95 percent confidence that the maximum error attributable to sampling and other random effects is plus or minus 3 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
