CONSUMER confidence increased in the north at the start of 2019, despite ongoing concerns over the lack of a local government.
The latest Danske Bank data covering the first three months of the year shows a rise in confidence to 139, compared to the previous quarter (127). However the figure is below that recorded in the same period a year ago (142).
One of the main drivers behind the improved display was the strong performance of the Northern Ireland labour market, with over a quarter (28 per cent) of respondents highlighted rising wages as the biggest boost to confidence levels.
The ongoing local political impasse was cited as the main issue causing the largest negative impact on consumer confidence (28 per cent), closely followed by the lack of progress in Brexit negotiations (22 per cent). Rising prices were also cited by one in five (21 per cent) of consumers as a cause of concern.
The figures further revealed an improvement on the previous year in relation to current financial position, with 21 per cent reporting an upswing and 20 per cent reporting a deterioration.
Looking ahead and more people (22 per cent) expect their financial position to improve in the next year, compared to the previous quarter, while 17 per cent expect it to worsen.There was also rise in the part of the index that looks at job security.
In relation to expectations surrounding future spending on high value items and savings the outlook is positive in comparison to the last survey, but down on the same period in 2018.
Danske Bank chief economist, Conor Lambe said at a time of "high uncertainty" it is heartening to see an improvement in consumer confidence, largely supplemented by the local labour market.
"The latest official figures show that the employment rate in Northern Ireland is at a series high, the unemployment rate is the joint lowest on record and businesses have been adding more employees every quarter since the start of 2016," he said.
“Economic theory would suggest that this relatively strong performance should put upward pressure on earnings growth and our survey is showing that to be the case."
“In both 2017 and 2018, consumer confidence increased strongly in the first quarter of the year, but then weakened in the following quarters. Whether a similar trend can be avoided in 2019 will likely depend on whether the labour market remains in relatively good shape, if the new political talks can lead to the restoration of the Executive and on how the Brexit process evolves over the rest of the year," Mr Lambe added.
