Citi Survey Finds Boston Residents Making Significant Spending and Savings Changes but More Optimistic Than the Rest of the U.S. That Economic Circumstances Will Improve

      

Compared to national survey data released by Citi in September 2009, key findings from Citi's Boston survey illustrate:

• Forty-eight percent of Boston residents believe that the country's economic conditions have a ways to go before hitting bottom, an assessment not nearly as bleak as the 63% at the national level.
• Sixty-five percent of Bostonians expect that local business conditions will become much or somewhat better over the next 12 months, compared to 57% nationally who believe business conditions will get better in their area.
• This optimism also is felt at the micro-level, with 68% of Boston adults optimistic that their own financial situation will improve in the next year, compared to 65% nationally.

Despite this growing feeling of optimism, Boston residents still expressed significant concerns about the state of today's economy. Only 28% of Bostonians rate the economy in their area as excellent or good, while 72% describe the local economy as only fair or poor; this figure compares with 22% of national survey participants that rate the economy as excellent or good.

Nearly three in ten (29%) Boston area residents cite the cost of health care as the element of America's economy that worries them most today, with 22% expressing greater concern with the amount they pay for necessities such as food and gasoline.

"At Citi, we are committed to understanding our customers' needs and community concerns," said Citi Chief Executive Officer Vikram Pandit. "With these insights, we will work with community leaders, elected officials and organizations throughout Massachusetts and the Greater Boston area to identify how we can together best help provide assistance and relieve the economic pressures individuals and families are facing."

Mr. Pandit is in the Greater Boston area today to meet with Citi employees and local community groups that Citi partners with in the area. In addition, he is speaking with economics students at Wellesley College. Lisa Caputo, Chairman and Chief Executive Officer of Women & Co. and Executive Vice President, Global Marketing and Corporate Affairs at Citi, accompanied Mr. Pandit.

Confidence Building around Boston Housing

Looking specifically at the housing market, Boston area residents are more likely to say that homes will increase in value rather than go down, with nearly two in three homeowners reporting their belief that they could sell their house today for more than they paid for it. Three in ten (31%) of Bostonians believe the value of homes in their area will go up in the next year, with 16% saying values will go down and 50% stating they will remain the same. By a margin of 64% to 17%, Boston area residents believe that if they put their homes on the market today, they would be able to sell them for more than they paid, rather than less. Another 17% believe that they could sell their home for about the same price.

Boston Women Worry Most About the Cost of Healthcare and Everyday Purchases

In previous research, Citi had found that the majority of women nationwide (65 percent) had permanently changed their spending and saving habits in response to the recession, but 58 percent were optimistic overall that business conditions would improve.

Looking specifically at the financial circumstances of women in the area, Boston women say they worry most about the cost of healthcare (31%) and necessities (25%), such as food and gasoline, and one in five women say when they can't sleep at night they are worried about paying their bills and losing their jobs. In addition, one-third of women say they are working longer hours to make ends meet.

Although they remain optimistic about future business conditions in the local market (68% are optimistic), Boston area women continue to scale back on their spending habits with 72% reporting that they have cut back on everyday expenses, compared to 66% of Boston men. Moreover, Boston women are more likely than men to say now is a "poor" or "only fair" time to purchase a big ticket item (61% of women compared to 50% of men), and more than half of Boston women (54%) have taken action in the past few months to postpone a major purchase because of the economy.

"Women are a critical barometer for the U.S. economy because they drive the majority of household spending decisions and, increasingly, manage how families invest," said Ms. Caputo. "As we continue to serve our Boston area customers, surveys like these provide valuable tools in helping us gain deeper insight about our clients' needs and aspirations."

Survey Methodology

Hart Research Associates conducted the telephone survey of 500 adults in the Boston area from September 12 to 15, 2009. The Random Digit Dialed (RDD) survey has an overall statistical margin of sampling error of plus or minus 4.4 percentage points. Hart conducted the national survey of 2,005 adults nationally between September 1-5, 2009. It has a sampling error of plus or minus 2.2 percentage points. The survey also included a sample of respondents who use only a mobile telephone.

About Citi

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. 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, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.

Citi
Liz Fogarty, 212-559-0486