Poll: Economy worries Mainers

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Most Mainers believe the state’s economy is in worse shape than it was a year ago, but are split on whether it will get better or even worse in the coming year, according to a new study released Wednesday.

The pollsters said people were worrying about the economy many months before the terrorist attacks, but that the tragic events of Sept. 11 put the economy and personal safety at the top of consumer concerns.

“I think with the terrorist attacks, it focused their attention on the economy,” said Mary FitzGerald, president of Critical Insights, a Portland-based polling firm.

Critical Insights conducted its twice-yearly survey about two weeks after the attacks, from Sept. 22 to Sept. 26. It interviewed 400 randomly selected people throughout the state on a number of issues, from their perception of President Bush to their feelings about terrorism. But the survey’s primary focus was the economy.

Sixty-seven percent of the people surveyed said the economy is in worse shape now than it was a year ago. When a similar survey was conducted last fall, only 17 percent said they thought the economy would be in this poor shape by now.

Even if the terrorist attacks hadn’t occurred, Laurie LaChance, the state’s economist, said she would have expected a “decent size percentage” of Mainers expecting the economy would deteriorate. But the attacks did happen and they have made consumers even more jittery, she said.

“Had they taken the survey before Sept. 11, [respondents] might have been slightly more optimistic, although most indicators were pointing to things softening – weakening retail sales and weakening consumer confidence,” LaChance said. “Certainly some of those would have suggested rough times ahead, and that has been increased because of the shocks to our economic system.”

What does the future hold? Forty percent said they anticipate the economy will worsen in the next year, while 33 percent said it will improve and 24 percent said it would be about the same.

The mixed feelings of Maine consumers are in tune with those of an economic analyst at the State Planning Office. Galen Rose said he, along with other economists, is trying to figure out which way the economy will go, just like consumers are.

The state’s economy started to sag in midsummer of last year, Rose said, and “by July [of this year] we started seeing things getting weaker, and they still are.”

“My own feeling on that is that it will worsen first before it will get better,” Rose said. “Twelve months from now, I think the economy will be better.”

According to the survey, people haven’t changed their approach to saving money. Forty-five percent said they are putting about the same amount of money into savings accounts, while 17 percent are depositing more and 38 percent are depositing less, according to the survey. Those numbers are comparable to most of the surveys conducted by the polling firm every spring and fall since the spring of 1999.

FitzGerald said it doesn’t surprise her that people haven’t changed their savings habits. She said people are still trying to figure out what will happen next before deciding what to do themselves. Once there is a more definitive military response by the federal government, “people are going to start stockpiling things,” she predicted.

Although economic indicators suggest a weak fourth quarter for retail sales statewide, which includes the holiday season, Rose said the state’s economy “hasn’t come to a halt.” People still need to spend money, he said.

“We still have to eat, we still have to buy gas, we still have to pay rent,” Rose said. “It’s around the margins – the person buying the new car that may hold off because he’s concerned about losing his job – that’s the kind of thing that will affect the economy.”

At Maine Revenue Services, the agency that collects taxes, analysts are waiting to crunch the numbers on how much consumers actually held back on shopping in September.

“The only thing we know now is anecdotal evidence,” said Jerry Stanhope, a financial analyst with Maine Revenue Services.

“We’re still picking ourselves up and moving on,” said LaChance, referring to consumers’ reactions to the attacks. “I think it’s highly likely we’ll see some slower times ahead.”

Regardless of the slow times, 70 percent of the respondents said they do not believe they or any member of their household will lose their job in the next six months.

The survey also asked people about oil and gas prices, and whether that was affecting how they heat their homes or drive their cars. Seventy-five percent of the respondents use oil to heat their homes, but instability in petroleum prices has not changed the way 72 percent of those surveyed warm up in the winter months. Forty-eight percent are concerned that power costs will go up, while 55 percent believe the price of gas will escalate.

Four hundred residents from across the state also responded to other questions from the Portland-based polling firm Critical Insights. Among the results:

. Seventy percent think fighting terrorism is the most important priority for President Bush and Congress to address this year. Strengthening the economy was a priority for 21 percent of the respondents.

. At the state level, the economy is the key issue, according to 22 percent of the respondents, while terrorism is the second concern, at 19 percent.

. Sixty-eight percent of Mainers surveyed think the United States should take military action against a country that harbors terrorists even if that country played no role in the attacks. Nationally, 75 percent believe the military should act.

. Sixty-three percent believe that if a ground invasion becomes necessary, the federal government should reinstate the draft.

. Fifty-five percent believe that based on what they know, a foreign government also was involved in the terrorist attacks. Thirty-nine percent think the attacks were committed by a band of independent terrorists.

. Fifty-four percent think the United States? relations toward Israel should remain the same. Another 25 percent said relations should be closer, while 14 percent said they should be more distant.

. Sixty-three percent of Mainers believe Osama bin Laden will be captured or killed.

. Seventy-three percent would support new laws to strengthen measures against terrorism even if it means reducing privacy protections such as limits on government searches and wiretapping.

. Eighty-seven percent think the United States should toughen restrictions on visas for foreign students and other visitors in the United States.

. Ninety-two percent favor the federal government?s regulating security at airports.

. Ninety-one percent favor having an armed marshal present on each plane.

. Sixty-nine percent give a favorable opinion of Bush, up from 34 percent last spring. Nationally, a Gallup Poll dated Sept. 21-22 said 90 percent of Americans give Bush a favorable rating.

. Eighty percent of the respondents said they displayed the American flag after the attacks, and 63 percent said they donated money. Other reactions to the attacks include 52 percent saying they attended a vigil or memorial service, 10 percent saying they donated blood and 14 percent saying they volunteered their time or services.

. Eighteen percent said they had a personal connection to someone who was at the World Trade Center or the Pentagon during the attacks.

. Fifty-one percent believe fewer visitors will come to Maine this fall.