A new statewide poll shows that Arizona’s economic recovery could be built on the back of broken washing machines and worn-out transmissions.
The Behavior Research Center found that three fourths of Arizonans say they have cut back a lot on their purchases since the recession began. And most of those describe their spending reductions as “a lot.’’
But pollster Earl de Berge said it also appears that, recession or not, there comes a point where people have no choice but to buy something.
Fully a third of those questioned told researchers they had reached a point where some major purchases just could not be put off any longer. And de Berge found that most of these people were not the ones at the top of the income scale who could most afford it.
“Clearly, the spending that we’re seeing is driven by the need to replace something that’s worn out,’’ said Marshall Vest, an economist at the Eller College of Management at the University of Arizona.
Dennis Hoffman, economist at the W.P. Carey School of Business at Arizona State University, said he has seen a similar pattern.
“Stuff is wearing out,’’ he said. “And when things wear out, it’s time to buy the new car, it’s time to buy the new appliance.’’
Making some of those purchases may require borrowing. But Hoffman said those who can qualify for financing would be advised to take advantage of that.
“You can strike smoking deals right now,’’ he said, with great bargains to be had not only on cars but also on appliances and furniture.
Vest said, though, that more is at play in the uptick in spending than just the fact that things break.
“Even though consumer confidence is low and has fallen, consumers continue to spend,’’ he said. Vest suggested there is some psychology involved.
“After a while, you just get tired of pinching the penny and decide you need to have an emotional release and go buy something,’’ Vest said. And that, he explained, is one reason that prior recessions do not last forever.
“This recovery has been so slow and people have been worried for so long that perhaps they’re reaching their limit,’’ he said.
Hoffman said part of what happened is that even those who have been employed all through the recession froze their buying.
“I think that some of them are thawing out a little bit,’’ he said, even if they remain worried about the economy.
“It’s wise people making prudent, careful, long-run spending decisions that can lead to long-run fundamental growth,’’ Hoffman said. And Hoffman said the evidence is that they are being smarter about their spending and not using the equity on their home as a credit line to make purchases.
The Behavior Research Center report is based on a telephone survey of 700 adult heads of households conducted earlier this month. It has a margin of error of 3.8 percent.