Consumer confidence in Northern Ireland fell again in the third quarter of 2018, weighed down by concerns over the absence of a functioning Executive, Brexit and high inflation, according to analysis published today by Danske Bank.
The Danske Bank Northern Ireland Consumer Confidence Index fell to a reading of 123, down from 131 in the last quarter and 135 a year ago.
Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:
“This fall in consumer confidence marked the second consecutive quarterly decline in our index and resulted in confidence levels hitting their lowest point in 2018 so far. Falls were observed both over the quarter and over the year in the parts of the index that examine how people feel about their current finances, future finances, job security and future spending.
“Just under a third of people highlighted the local political impasse and the lack of a functioning Executive as the factor that had the largest negative impact on their confidence levels. Those surveyed also pointed to high inflation as something which put a dent in confidence.
“However, there was some encouraging news in our study. One in five of those we surveyed said rising wages was the factor that had the biggest positive impact on how they were feeling. This follows official data showing that over the year to April 2018, weekly earnings for full-time employees in Northern Ireland increased at their fastest rate since 2015. This all shows that there is some upward pressure being applied to the size of people’s pay packets.
“Another interesting point to note in this survey was with regards to Brexit-related factors. Thirteen per cent of people highlighted the pace of progress during the Brexit negotiations in recent months as the factor which had the biggest negative impact on them. A further 11 per cent said the Government’s longer-term Brexit objectives affected them most negatively. This compares with just 8 per cent and 6 per cent of people respectively who identified these same two factors as having the biggest positive impact on them. It appears as if the uncertainty around Brexit is an issue not just for businesses in Northern Ireland, but for consumers as well.”
Current financial position compared with last year
The part of the survey which examines how consumers feel about their current financial position compared with a year ago experienced a fall over the quarter and over the year.
Seventeen per cent of respondents felt that their financial position had improved over the past twelve months, but 29 per cent felt it had deteriorated.
Women felt worse about their current financial position than men. Twenty per cent of men felt their finances had improved over the past year, while 28 per cent felt worse off. But only 14 per cent of women felt better off than a year ago and 31 per cent felt their finances had deteriorated.
Expectations for finances over the next twelve months
There was a fall in the part of the index focused on consumers’ expectations of how their financial position will change over the next twelve months.
Twenty-nine per cent of people expected their finances to worsen over the next year, while only 16 per cent of those surveyed expected their financial position to improve.
Young people felt more optimistic about their future finances than older people. A higher number of 16-24 year olds expected to be better off in a year’s time than expected to be worse off. But the opposite was true for all the age categories above 35 years old.
Expectations around job security
There was a slight fall in the part of the index that looks at job security.
Nine per cent of people expected to become more secure in their job, and 15 per cent of people expected their job security to deteriorate. However, the majority of people surveyed did not expect their job security to change over the year ahead.
The proportion of people expecting their job security to improve was highest in South region. The area in which the largest percentage of people expected their job security to deteriorate was North region.
Expectations around spending on high value items
The part of the index that indicates the amount consumers expect to spend on high-value items over the next twelve months also fell.
Seventeen per cent of consumers expected to spend more on expensive items, such as furniture and holidays over the next year, but 27 per cent expected to spend less.
Consumers’ savings expectations increased slightly over the quarter, but fell over the year.
Twelve per cent of people expected to save more this year than they did last year, but 28 per cent thought they wouldn’t be able to save as much over the year ahead.
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