Paying ATTENTION...
to people and their money

Janet Davis, President, TIC FCU

Georgians Adjusting to 'New Normal' with Cautious Spending, Doubts on Economic Turnaround
New Consumer Poll and Recent Credit Union Data Reflect Trend Toward Austerity

ATLANTA (Feb. 23, 2011) - Georgia consumers are not optimistic about the state's economic condition, with just 12 percent of respondents to the latest poll from Georgia Credit Union Affiliates (GCUA) saying they believe the economy has improved in the past year. The rest characterized Georgia's economic situation as either about the same or getting worse than last year, sentiments which could have a material impact on consumer saving and spending throughout the state.

The quarterly Georgia Credit Unions' "Paying Attention" report indicates that, while consumers are working to build a buffer of savings by cutting back on expenses and delaying large purchases, they are still unprepared to deal with any further financial setbacks. The report compiled recent poll responses from more than 4,000 credit union members and aggregated data from credit unions statewide.

"As national statistics start to show an increase in consumer confidence, Georgia credit union members are still wary about their own personal financial health," said Mike Mercer, president and CEO of GCUA. "If the economy strengthens, consumers could become more optimistic. But, in the meantime, we expect to see cautious plans for spending and especially borrowing. In fact, loan demand at Georgia credit unions has been very soft."

Consumer Poll
The full report, available at www.georgiacreditunions.org, includes poll results measuring Georgia consumers' current economic mood, as well as savings and spending trends. Among the report's findings:

  • Only 12 percent of poll respondents believe the economy is improving compared to a year ago, with 40 percent saying they think it's getting worse.
  • More than 30 percent (32.9 percent) of respondents said they experienced changes in their employment situation during the recession, ranging from layoffs to pay cuts to having to take a second job.
  • More than one-third of respondents (35.7 percent) said they had no reserve savings to cover essential expenses if they were to lose their job or other source of income. On the other hand, 18.9 percent said they had enough savings to cover more than one year without a source of income.
  • Almost two-thirds of respondents (65.6 percent) said they have changed their personal savings habits over the past six months, including spending less or cutting expenses like eating out and taking trips.
  • Compared to 2010, respondents appear even more wary about making large purchases. 63.3 percent said they do not plan to purchase any big-ticket items in 2011, compared to 52.1 percent who said they avoided large purchases last year.
  • Half (50 percent) of respondents say they will pay for their large purchases with cash from savings.

Credit Union Data Show Continued Trend Toward Savings
In conjunction with the consumer poll, GCUA compiled savings and lending data from 39 credit unions from across the state that represents 91 percent of credit union assets and 83 percent of members in Georgia. The findings, outlined in the chart below, reflect a continuing trend toward savings, while figures for lending varied:

  • Savings deposits rose at an annualized rate of 5.42 percent during 2010, just slightly less than the 6.24 percent rise in 2009. Checking account balances also grew by 13.12 percent in 2010.
  • New vehicle loans continue to decline, with more consumers opting for used car loans: new vehicle loan balances fell by 10.42 percent in 2010, while used car loan balances increased by 7.16 percent, continuing a trend from 2009.
  • First mortgage balances increased by 9.89 percent in 2010.
  • The number of bankruptcy filings among members rose 12.47 percent in 2010 compared to 2009.

More information is available at www.georgiacreditunions.org or on facebook.com/creditYOUnion.

About Georgia Credit Union Affiliates
Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state’s more than 1.8 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 154 credit unions, with combined total assets of almost $16 billion. More information can be found at www.georgiacreditunions.org.

Archived Versions
- Georgians' Holiday Spending Plans Reflect Current Consumer Mindset
- Poll: Georgians Cautiously Optimistic on Spending, Financial Future

Trends at Georgia Credit Unions
Consumer Savings
(Balances)
Consumer Credit
(Balances)
Growth Rates
(Annualized)
Growth Rates
(Annualized)
 
2010
2009
   
2010
2009
Regular Savings 5.42% 6.24%   Credit Card 4.52% 10.91%
Money Market Acts 21.21% 67.49% Other Unsecured -0.88% 4.53%
Certificates of Deposit -0.23% 10.46% New Vehicle -10.42% -9.28%
IRA/KEOGH Acts 8.73% 28.54% Used Vehicle 7.16% 7.71%

Transaction Accounts
(Balances)
1st Mortgage 9.89% 23.00%
 
Growth Rates
(Annualized)
Other Real Estate 0.70% 3.32%
 
2010
2009
Business 30.60% 59.29%
Checking Accounts 13.12% 21.60%        
        Number of Bankruptcy Filings:
        YTD # of Filings   6,875
        % Change from 2009   12.47%
         
Georgia Credit Union Affiliates