Second in a two-part series examining investor optimism in individual U.S. states. Last week's column discussed several states in the Western and Midwestern regions.
In examining last year's optimism levels among investors in key Eastern and Southern states* using the Gallup/UBS Index of Investor Optimism -- U.S.**, the juxtaposition between the two regions is interesting. Eastern investors were by far the least optimistic last year, while Southern investors were the most optimistic. It almost appears that optimism in the South was slowing, if not halting, its downward spiral by the end of the year.
The Personal Dimension of the Index refers to investors' views of their own situations, and the Economic Dimension concerns investors' views of the economy in general. The overall Index aggregates the Personal and Economic Dimensions to chart an overall trajectory of optimism.
EASTERN STATES
New York
Residents of New York state provided an excellent example of Eastern investors' despondency last year. Overall, investor optimism was at 116 in the first quarter of 2002 there, but fell to 71 in the second quarter. By the third quarter, it was down to 30, and the headlong slide never stopped. The year ended at -4, for a total loss of 120 points.
The Personal Dimension lost 51 points, going from 79 in the first quarter, to 63 in the second, to 25 in the third. New York's Personal Dimension held steady in the fourth quarter at 28.
The Index's Economic Dimension took the biggest hit among New York residents. This dimension started the year at 37, then dropped to 8, then 4. In the fourth quarter, the Economic Dimension bottomed out at -32.
New Jersey
New Jersey investors were certainly not optimistic, but they were less pessimistic in 2002 than their compatriots in New York. Overall, optimism dropped 75 points among New Jersey investors, going from 108 in the first quarter to 33 in the fourth.
The Personal Dimension lost 42 points in New Jersey. The first quarter started at a not-totally-hopeless 82, dropped to 62 in the second quarter, 45 in the third, and held at 40 in the fourth.
The Economic Dimension showed a meager 26 in the first quarter, nearly halved in the second quarter (14), then slipped into negative numbers for the second half of the year (-6 in the third quarter, -7 in the fourth quarter).
Pennsylvania
Investors in Pennsylvania were slightly more optimistic than New Yorkers, and slightly less optimistic than investors in New Jersey. Overall, the Index dropped 109 points, going from 119 to 10.
As in the other states, the loss of optimism in the Personal Dimension in Pennsylvania was greatest, and the Economic Dimension showed the most negativity. Pennsylvania's Personal Dimension lost 59 points, going from 87 to 28. The Economic Dimension was at a dismal 32 in the first quarter, and grew steadily worse, reaching -18 by the fourth quarter.
SOUTHERN STATES
Texas
Though Texas investors were hardly jovial in 2002, they weren't as depressed as those in the Eastern states. Overall investor optimism in Texas started 2002 at 131. It then plunged to 84 in the second quarter. The second half of the year was relatively static -- 73 in the third quarter, and 70 in the fourth, for a total loss of 61 points.
Texas' Personal Dimension lost 31 points, going from 89 in the first quarter to 58 in the fourth. The Economic Dimension lost 30 points, going from 42 to 12.
Florida
Florida leads the nation in investor optimism. In 2002, overall optimism dropped only 56 points (only Illinois lost fewer at 55). Florida's Personal Dimension seemed to be holding steady, and the Economic Dimension significantly improved.
Overall, Florida investors started 2002 at a cautious 124. That number was nearly halved in the second quarter (63), and halved again in the third (32). However, by the fourth quarter, investor optimism rebounded to 68.
Florida's Personal Dimension started 2002 at 89, dropped to 57 in the second quarter, and dipped again to 42 in the third. The fourth quarter showed a heartening climb to 53.
Florida investors had more confidence in the national economy than investors in any other key state. The Economic Dimension started the year at 35, dropped to 6 in the second quarter and -10 in the third. However, in the fourth quarter, the Economic Dimension rose 25 points to end the year at 15.
*Gallup identifies these states as "East": Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Maryland, Delaware, West Virginia, and the District of Columbia
Gallup identifies these states as "West": Montana, Arizona, Colorado, Idaho, Wyoming, Utah, Nevada, New Mexico, California, Oregon, and Washington
Gallup identifies these states as "South": Virginia, North Carolina, South Carolina, Georgia, Florida, Kentucky, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Oklahoma, and Texas
Gallup identifies these states as "Midwest": Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas
**Results for the Gallup/UBS Index of Investor Optimism -- U.S. are based on monthly interviews with about 1,000 U.S. investors, aged 18 and older. For results based on each of these samples, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3%. 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.
