Consumer Confidence Takes Hit From Hurricanes Irma & Harvey
ALEXANDRIA, Va. — In the aftermath of two back-to-back hurricanes that sent fuel supply and demand into a whirlwind, consumers are feeling less optimistic about the economy, the latest Consumer Fuels Survey from NACS, the Association for Convenience & Fuel Retailing, found.
With gas prices rising 30 cents over the 30-day period to $2.59 at the time of the survey, more than four in five Americans (83 percent) say that gas prices impact their feelings about the economy. Overall, 54 percent of Americans are optimistic about the economy — a 6-point drop from the prior month and the lowest level since October 2016.
Approximately 82 percent of consumers say that gas prices are “much higher” (32 percent) or “somewhat higher” (50 percent) compared to 30 days ago. This is the largest monthly increase reported in nearly five years of the survey, which has fielded continuously since January 2013, according to the association.
Consumers in the southern U.S. are the most likely to say prices today are “much higher” than 30 days ago (42 percent) because this region has been impacted the most from Hurricanes Harvey and Irma. However, the general impact of “higher” prices is observed across all regions: 81 percent in the Northeast, 80 percent in the Midwest, 88 percent in the South, and 76 percent in the West.
Anticipating lingering effects from Hurricanes Harvey and Irma, 55 percent of American gas consumers say they believe that gas prices 30 days from now with be higher than today. That being said, consumers over the past several months have reported an expectation of rising gas prices, including 42 percent in August anticipating higher September prices, and 41 percent in July anticipating a higher August price.
According to NACS, Texas alone has 10,522 convenience stores selling fuel, which equates to 8.5 percent of all c-stores selling fuel in the U.S. Following that is Florida with 6.639 stores (5.4 percent); Georgia with 5,331 stores (4.3 percent); Alabama with 2,929 stores (2.4 percent); and Tennessee with 2,961 stores (2.4 percent).
Because of Hurricane Harvey — which was the first major hurricane to hit the U.S. mainland since 2005 — approximately 10 percent of U.S. refining capacity is still offline.
“So far we are seeing the same patterns that we typically see after major storms, with retail prices lagging behind wholesale prices. From Aug. 23 through Sept. 4, wholesale prices jumped 21.1 percent and retail prices went up 12.7 percent. Similar metrics were seen after Katrina and Rita in 2005, the last time a major hurricane hit the U.S. mainland. Like their customers, retailers hope that the damage to the fueling infrastructure — including to their retail locations — is minimal and can quickly return to normal operations,” said Jeff Lenard, NACS vice president of strategic industry initiatives.
The September NACS survey was conducted in the aftermath of Hurricane Harvey and during the time that warnings of Hurricane Irma dominated the national news and large chunks of the Southeast faced evacuations and concerns over fuel availability.
NACS represents the convenience store industry that sells 80 percent of the gas in the United States. The association conducts monthly consumer surveys to gauge how gas prices affect broader economic trends. The survey was conducted online by Penn Schoen Berland. From Sept. 5-8, it surveyed 1,162 U.S. adults who purchased fuel for a vehicle such as a car, truck or van at least once per month.