Friday, November 30, 2001

Washington-area residents are just as anxious about the economy as most Americans, with one in 10 worried about losing their jobs and one in four saying they are spending less money, according to a survey released yesterday.

The survey of 800 adults in the region this month by Potomac Inc. for the Greater Washington Board of Trade mirrors national polls that find Americans are spending less, traveling less, avoiding public places and large gatherings, spending more time at home with family and friends, and saving more in the wake of the September 11 terrorist attacks, out of a mix of fear for their jobs and concerns about personal safety. This was the first local survey since the attacks.

The loss of confidence coincides with a deepening of the recession nationwide, and economists say it could prolong the downturn. Locally, it has caused a drop in visits to tourist sites, restaurants, theaters, and other attractions in the city, though it appears to have benefited many businesses in the suburbs where Washingtonians have been holing up since the nation came under attack.

“Naturally, a large share of the public is concerned about fallout from the events of the past couple of months,” said Keith Haller, president of the polling firm.

The survey found that one-third of Washingtonians were worried about being exposed to anthrax a much higher percentage than other areas but local residents were less likely than other Americans to cancel their travel plans.

About one in six Washingtonians reported canceling trips in the wake of the attacks and about the same number said they are going into downtown Washington less often. About one in 10 have stopped opening all or some of their mail, and about one in 12 has thought seriously about moving out of the area because of the attacks.

One of the more positive findings from the survey is that area residents feel more interconnected, identify more with the region, are giving more to charity and want to participate in collective solutions to local problems.

Support for a regional transportation authority to solve thorny problems with traffic congestion, for example, surged to 57 percent from 49 percent in August. Two-thirds have donated money to an emergency fund like the Red Cross.

“People are much more likely to be taking action to help address the problems they see in the community,” Mr. Haller said.

Residents are giving the region’s leaders generally high marks for their handling of the anthrax and terrorist attacks, though they see room for improvement in emergency preparedness.

Economists are concerned about the steep decline in consumer confidence after the attacks, since a recovery in the economy depends on consumers being willing to keep spending more even in the face of sometimes-depressing news.

While confidence has steadily eroded, spending patterns have been more mixed. Sales at discount stores like Wal-Mart and Costco continue to climb, and sales of cars and sport utility vehicles hit close to record levels last month in response to interest-free financing offers. But sales at luxury good retailers and many mall outlets and department stores have dropped precipitously.

Steven Fuller, a professor of public policy at George Mason University, said consumers are being choosier about what they buy, looking for bargains, avoiding luxuries and sticking to necessities.

“Washingtonians think they’re spending less because they’re being more careful about spending,” he said, but the overall volume of sales continues to rise.

“I don’t believe it,” he said of the survey’s finding that one in four says he is spending less.

“Somebody’s spending more,” he said, noting a record 7.1 percent jump in retail sales nationwide last month on the strength of auto sales. Home sales have continued to rise as well, with new-home sales edging up another 0.2 percent last month.

Low interest rates and a large drop in gas prices from over $1.50 a gallon this spring to $1.13 last week has put more money in consumers’ pockets, Mr. Fuller said.

Also aiding Washington-area consumers is the dramatic growth in spending on defense and other government activities since the attacks, he said, noting that federal spending fuels about a third of local economic activity.

A 233 percent surge in aircraft orders, mostly from the Defense Department, last month led to an overall record increase in big-ticket orders from factories, the Commerce Department reported yesterday. The surge also reflected big new orders for cars, computers and communications equipment, reflecting the auto-buying binge and technology spending needs spurred by the attacks.

Despite the strong pickup in government spending, not all analysts are optimistic that will save the economy.

“The Defense Department will be a major player in the economy for some time to come,” said Joel Naroff of Naroff Economic Advisers. “But over last year, orders are still way off, so we still have a long way to go before we are back on solid ground.”

In an ominous sign for consumers yesterday, the Labor Department reported that unemployment claims continued to rise, with the number of people collecting jobless benefits jumping by 302,000 to more than 4 million for the first time in nearly two decades. And an index of help-wanted ads put out by the Conference Board fell to the lowest level since 1982.

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