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SURVEY FINDS CONSUMERS IN AREA DOWNCAST
BUDGET CRISIS BLAMED FOR DROP IN CONFIDENCE

The Erie County fiscal crisis is putting local consumers in a particularly sullen mood.

Consumer confidence in the Buffalo Niagara region slid for the fourth straight quarter during the winter, leaving sentiment levels in the area far below any of the five other New York metro areas included in the quarterly survey by researchers at Siena College in suburban Albany.

The winter swoon in consumer confidence left sentiment levels in the Buffalo Niagara region at, far and away, their lowest point in the 3 1/2 years that Siena has been conducting the survey.

"Buffalo is not doing well," said Douglas Lonnstrom, the director of the Siena Research Institute, which surveys New Yorkers about their willingness to spend.

While confidence levels throughout New York were down slightly during the first quarter of this year, the plunge in consumer sentiment in the Buffalo Niagara region was almost four times greater than the drop in Rochester, which had the second-largest decline.

While rising energy prices and sluggish job growth, coupled with rising interest rates and inflation, are dampening confidence levels throughout the state, Lonnstrom said the prolonged budget crisis in Erie County is putting consumers in the Buffalo Niagara region in a particularly downcast mood.

"That really affects consumer confidence and it's really affecting your confidence for the future," he said Wednesday. "Western New York is looking particularly dismal."

Buffalo Niagara residents were the only consumers in the six metro areas surveyed who felt their current situation was getting worse. And when they were asked about their expectations for the future, they were the least optimistic of any of the other metro areas.

Confidence levels also weakened in Rochester and Syracuse, although sentiment improved in Albany, New York City and Binghamton.

The mixed results came as sentiment levels nationally are declining, according to the national index calculated by the University of Michigan, which uses the same methodology as the Siena researchers. That index showed that confidence steadily declined during the first three months of the year.

Local consumer confidence plunged to a post- 9/1 1 low of 66.2 during the first quarter of this year, down from 71.6 in the fourth quarter of 2004. Confidence levels in the Buffalo Niagara region remained the lowest among all of the metro areas for the third straight quarter and are well below their high of 85.5 in the first three months of 2002.

The survey of 400 residents in each region found the highest confidence levels in Albany, where the heavy influence of state government on the local economy helps dampen economic volatility. New York City had the second-highest confidence levels for the sixth straight quarter.

e-mail: drobinson@buffnews.com