Citi California Pulse™ Survey Shows Half of Californians Expect 2011 to be Better than 2010

Many Californians believe 2011 will bring improvement in both the national and regional economies as well as in their own personal lives, according to the latest Citi California Pulse™. Half of those surveyed say they believe 2011 will be better than 2010, while 39 percent say they expect this year will be similar to last year and only 8 percent say it will be worse. When asked about conditions over the next 12 months, 64 percent expect their personal financial situation to improve and 55 percent say both job opportunities and the California economy will be better.

Rebecca Macieira-Kaufmann, President of Citibank California (Photo: Business Wire)

At the same time, Californians see little tangible evidence of economic improvement today, and as a result they continue to take action to improve their personal financial situation, such as cutting back on spending, and saving or investing more. Citibank’s latest quarterly survey found that in 2011, a majority of respondents plan to take a more active role in their finances (61 percent), cut back on everyday expenses (58 percent), save and invest more (57 percent), and make changes to improve their financial situation (56 percent.)

"Our survey continues to reflect the resiliency of California and its residents,” said Rebecca Macieira-Kaufmann, President of Citibank California. "The findings show optimism and hope for the future along with cautious behavior in the present, as most Californians remain realistic about the current environment but look forward to a better 2011 and beyond.”

Among the survey’s key findings:

• 91 percent call the economy in California only fair or poor;
• 87 percent rate job opportunities in California as only fair or poor;
• 60 percent say California is on the wrong track, while 25 percent say it is headed in the right direction;
• 48 percent say 2011 will be a good time to buy a home, while 47 percent say buyers should wait to see what happens to home prices;
• 45 percent say real estate prices will remain about the same in 2011, 28 percent say prices will increase, and 23 percent say they will fall;
• 19 percent say they plan to travel more in 2011 than in 2010; 48 percent about the same and 22 percent say less.

Spending Outlook – Males More Willing to Open Wallets

Continuing a trend of cautious spending that Citibank’s survey identified over the last year, few respondents say they will spend more on discretionary items in 2011, with the majority saying they plan to cut spending or keep it at 2010 levels. For example, only 17 percent say they will spend more on movies or plays this year, 10 percent on eating out, 9 percent on purchasing watches or jewelry, and 6 percent on gambling. Forty-one percent say they plan to spend more time connecting with friends or family.

The survey also found that California women are more conservative than the state’s men about spending; 41 percent of males rate the current environment a good time to buy big ticket items, such as cars or televisions, while only 29 percent of females agree. And on all discretionary items surveyed – from sporting events to books and music to new clothes – male respondents are more likely to increase spending this year than female respondents.

Regional and Age Differences

The survey found continuing differences among residents of Southern California and Northern California, as well as among younger and older Californians. When asked about living in California, 76 percent in the San Francisco area rate the state as an excellent or good place to live, while 24 percent call it only fair or poor. This compares to the Los Angeles area, where 59 percent say California is an excellent or good place to live and 39 percent rate it as only fair or poor. In addition:

• 65 percent in the San Francisco area believe job opportunities will be better in 12 months, compared to 55 percent in the Los Angeles area. Similarly 64 percent over those aged 18-34 believe job opportunities will be better in 12 months, compared to 49 percent of those aged 35-54.
• 60 percent in the Bay Area believe 2011 will be better than 2010, compared to 54 percent in Los Angeles. Among those aged 18-34, 64 percent see better times this year, compared to only 43 percent of those aged 35-54.
• And 78 percent of those aged 18-34 are optimistic that their own financial situation will improve in 12 months, while 61 percent of those aged 35-54 feel the same way.

Optimism Index

Overall, the Citi California Pulse Index of optimism fell back into negative territory in the fourth quarter (-2) after moving to zero in the third quarter; possible scores range from +100 to -100. The latest survey saw some deterioration in current economic conditions, with sentiment about current financial situation, comfort with savings, and making major purchases all declining.

About the survey

The Citi California Pulse™ is a quarterly survey focused on California consumer and small business sentiment regarding the current and future economic environment. This poll was conducted by telephone Dec. 17 - 23, 2010, among a random sample of 1,200 California residents, age 18 and older throughout the state. Interviews were conducted in both English and Spanish. The design includes interviews with cell phone respondents, 323 interviews in the San Francisco MSA, and 335 interviews in the Los Angeles MSA. The cell phone and MSA samples are weighted to the correct proportions. The margin of error for the entire sample is approximately +/- 3 percentage points. The margin of error is higher for subgroups. Abt SRBI Public Affairs, a major national polling firm conducted all interviewing. For additional information, visit: www.srbi.com.

Index Methodology

The Citi California Pulse™ Index of optimism is calculated by subtracting negative responses to each item from the positive responses for all 12 index items. The Index scale can range from +100 (if every respondent gave positive response to each of the 12 questions) to -100 (if all respondents expressed consistently negative views).

About Citibank

Citibank is a member of Citi^®, the leading global financial services company, which has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.

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