New survey links rising consumer confidence in Northern Ireland to vaccine roll-out
CONSUMER confidence in the north is on the rise in response to the successful roll-out of the Covid-19 vaccination programme, new analysis has shown.
A survey carried out by the north's biggest lender Danske Bank during March found local people more confident about their current finances, future finances, job security and spending on expensive items.
Half the respondents (49 per cent) identified the rollout of the coronavirus vaccine programme as the major reason for their growing confidence.
The survey formed the basis of the latest Danske Bank Northern Ireland Consumer Confidence Index.
The overall index increased to a reading of 137 in the first quarter (Q1) of 2021, up from 124 in Q4 2020 and well above the 119 reading posted in Q1 2020.
Last week Danske Bank announced that customer deposits had surged 28 per cent, or £2.2 billion, over the past year due to the Covid-19 restrictions and concerns over finances.
The lender's chief executive Kevin Kingston said he believed the economic cycle in the north was beginning to turn.
But while the trend of the consumer index continues to reflect recovery, the latest survey showed there is still a strong sense of caution among certain sectors.
Some 36 per cent of survey respondent said they expect to spend less on high value items over the next year, compared with 31 per cent who anticipate spending more.
And while 30 per cent felt their financial position had improved over the previous 12 months, 28 per cent of people said their finances had deteriorated.
One-in-three consumers (33 per cent) identified the new post-Brexit trading arrangements as a factor in negatively impacting their confidence levels.
The Covid-19 restrictions were viewed negatively by 20 per cent, with just 15 per cent viewing the regulations as a positive.
The impact of higher prices on household finances (12 per cent) and the performance of the local economy (10 per cent), also featured among consumer concerns.
Danske Bank chief economist Conor Lambe said the gradual easing of restrictions throughout April and May should result in higher in household spending over the coming months, contribuyting to growth in the economy in the second quarter.
But he said the sharp rise in household spending is unlikely to result in a massive spending splurge.
“While we expect a rise in overall consumer spending as the economy reopens, it's important to note that some people are likely to behave cautiously with regards to their spending levels.
“There is still considerable uncertainty around the future path of the pandemic, unemployment is projected to rise this year and people who have been furloughed may have seen their income squeezed, so some consumers may be less willing to spend than others.”