Consumer confidence in north at lowest level since late 2013
CONSUMER confidence in Northern Ireland fell sharply at the tail end of 2017 as the political uncertainty and high inflation weighed down on people's morale, new analysis shows.
Households aren't buying the big ticket items like kitchens, cars and holidays, while fewer are saving, more fear for their jobs and people simply feel they have less money in their pockets each month.
The figures are contained in the quarter Danske Bank NI Consumer Confidence Index, a respected barometer of household financial intentions.
It registered a reading of 123 in the October-December period - significantly below the 135 registered in the third quarter of 2017 and the 132 reading in the fourth quarter of 2016. Indeed it was at its lowest level since the fourth quarter of 2013.
“It's safe to conclude that the factors negatively impacting confidence far outweighed the factors having a positive impact," Danske Bank's chief economist Conor Lambe said:
“Indeed over the year there was a marked drop across all four of the sub-indices that make up the overall consumer confidence index.
"More than a third of respondents said the political uncertainty and the lack of an Executive had the largest negative impact on their confidence levels, while the rate of price rises also had a detrimental effect.”
The component of the index that examines households' expectations of how their financial position will change over the next year registered a reading of 140 in the fourth quarter - down from 156 in quarter three and 151 the previous year.
Mr Lambe said: “The inflation rate is expected to decrease gradually in 2018, but we are forecasting that it will remain above the Bank of England's target and average 2.6 per cent over the year as a whole.
"Falling inflation should see the squeeze on consumers ease a little as we go through the year, but we still expect household spending power to remain under pressure. The fall in this part of the index suggests that consumers have similar expectations.”
On future spending intentions on high value items, 25 per cent of people think they'll spend less, though 17 per cent of respondents expect to spend more over the next twelve months, but
On savings expectations, eight per cent expect to put away more this year than in 2017, but 30 per cent of people believe they'll save less.
Mr Lambe said: “When considered alongside the other parts of our analysis, especially the falls observed in the sub-indices related to households' future financial positions and expected spending on big-ticket items, it appears that consumers don't believe they will have sufficient disposable income over the next 12 months to substantially increase the amount they hold in savings.”