Business

Consumer confidence bounces back at the start of 2017 says Danske Bank index

MORE people in Northern Ireland say they'll be content to splash out on some big-ticket items this year such as furniture or holidays, and most remain content that'll they'll keep their jobs.

And according to the latest consumer confidence index from Danske Bank, it points towards the outcome of Brexit perhaps not being as severe as many had forecast.

The business barometer revealed that consumer confidence in the north has bounced back at the start of 2017 - up nine percentage points in the first quarter compared to the last three months of last year.

“Despite the fact that inflation is rising and exerting some pressure on households’ spending power, consumer confidence surprised on the upside in the first three months of this year," Danske Bank economist Conor Lambe says.

"Indeed the index shows that consumer confidence in Northern Ireland is at its highest level since the third quarter of 2015."

He added: "This strong bounce back could, in part, be due to consumers now having more clarity about the UK Government’s planned approach to the Brexit negotiations, and that the UK and EU have both shown willingness to find a solution to the border issue.

"The rise could also be interpreted as a sign that, while economic growth is expected to slow, consumers now feel confident that the short-term impact of the EU referendum on the economy is not going to be as severe as first thought.”

The survey, undertaken on Danske's behalf by Millward Brown, gauges consumers' opinions of how their financial position compares to 12 months ago and looks at expectations of how household financial positions will change, job security, expectations of the amount people will spend on high value items, and also gathers information on household savings.

Among the key findings were that 35 per cent of Northern Ireland consumers plan to holiday abroad this year, while 7 per cent will "staycation", 7 per cent will head for England, Scotland or Wales, and 7 per cent will nip across the border to the Republic. Ten per cent don’t know yet where they'll go on holiday in 2017 - and the remainder won't holiday at all.

Mr Lambe said: “Given the depreciation of sterling since the referendum, the numbers do suggest that the relative weakness of the pound could be having an impact on consumers’ holiday plans.

"Taken together, 59 per cent of consumers are either not planning on going on holiday, hope to holiday domestically or don’t know where they will go, and the weakness of the pound could be feeding into those decisions.”

Elsewhere, 25 per cent of full-time workers believe their finances have improved over the last year while for 40 per cent it's got worse.

Household expectations of how their financial position will change over the next 12 months improved by 13 points over the quarter while consumers’ expectations around job security were unchanged over the quarter, but three points higher than they were in the first quarter of 2016.

Expectations of the amount people will spend on high value items saw a marked increase of 13 points over the quarter and 14 points over the year.