Nine of Ten Consumers Postponing Big Purchases Through 2010

Fear that a double dip recession will threaten their personal finances is driving nine out of ten potential buyers out of the market for big ticket items like homes and cars for at least the next three to four months, according to a new national consumer survey released today.

A survey taken in the last week of August by the polling firm StrategyOne suggests that fence sitting by home buyers will dramatically increase in the fourth quarter. Some 87 percent of consumers say they do not plan to make a big-ticket purchase (such as a house or car) in the next 3 to 4 months. Nearly half, 49 percent, say they have already delayed making a big-ticket purchase during the past few months. Only 13 percent said they plan to make a big purchase during the balance of the year.

Consumers will be less likely to cut back on overall spending than on big ticket items. Over half, 52 percent, expect to spend the same amount in the fourth quarter as they did during the last three months. Forty-one percent plan to spend less and only 8 percent plan to spend more.

As they brace for a second downturn, Americans are cutting their spending and preparing for an extended financial siege. Just 5 percent think there will be a full economic recovery by the end of this year, and only another 21 percent see recovery taking place by the end of 2011. Half of all Americans polled (50 percent) see a recovery not coming until sometime after the end of 2011, and about a quarter (23 percent) doubt our economy will ever fully recover.

Almost two in three Americans (65 percent) say a double-dip recession — defined as a recession followed by a short-lived recovery, followed by another recession — is now likely to happen. Among those who expect a double-dip recession, nearly half (44 percent) fear it will be worse than the first one, with 21 percent worried it will be “much more severe.” Just 24 percent think the second recession will be less severe.

As far as their personal finances, only one of four Americans expects to recover by the end of the year. Nearly half, 46 percent, don’t expect to recover until the end of 2011 or later; 26 percent say they will never recover financially.

“The American public — characteristically optimistic and resilient — is looking around and seeing more and more dark storm clouds approaching on the horizon,” said Bradley Honan, senior vice president of StrategyOne. “Not only has confidence in the economy been severely undermined, there are now real, significant doubts emerging about our country.”