Consumer confidence plunges - and most in Northern Ireland fear things will worsen
CONSUMER confidence is continuing to plummet in the north as people struggle against a backdrop of soaring inflation, current and future financial worries, and insecurity around their jobs.
That's according to the closely-watched Danske Bank quarterly consumer confidence index, which looks at current and future spending trends.
It plunged to 92 in the third quarter of 2022 - down from 103 in the second quarter of the year and well below the 137 posted in the third quarter of 2021.
And expect more pain to come, because on the issue of their future finances, nearly two thirds (63 per cent) fear things will worsen, with just 15 per cent expecting an improvement.
Consumer confidence is an economic indicator which measures the degree of optimism consumers have regarding the overall state of the region's economy and their own financial situations.
Nearly half (47 per cent) of respondents blame their rock-bottom confidence on the impact of higher prices on their household finances including food and fuel bills, while 13 per cent pointed to global risks such the war in Ukraine, and 11 per cent highlighted the post-Brexit trading arrangements in Northern Ireland.
For 35 per cent of those surveyed, society’s adjustment to living with Covid-19 had the largest positive impact on their confidence levels, with 23 per cent unsure of what was making them feel more positive and 14 per cent of respondents stating the overall performance of the local economy boosted confidence.
Just 18 per cent of people felt their financial position had improved over the past 12 months, but three times more (56 per cent) believed their finances were in a worse position.
Expectations around job security fell over the quarter, with 58 per cent feeling things would remain unchanged (to get better or to worse, it was 12 per cent each).
In terms of spending, 18 per cent of consumers are still prepared to splurge on expensive items over the next year, but 55 per cent are pledging to tighten their belts.
Danske Bank chief economist Conor Lambe said: “Inflation in the UK is at a multi-decade high and is exerting a significant squeeze on consumer spending power. In September, the month our survey was completed, the annual inflation rate in the UK was 10.1 per cent and it increased to 11.1 per cent in October, more than five times its 2 per cent target rate.
“Beneath the headline figures, price pressures are evident across a wide range of goods and services including household energy, motor fuels and food.
“Looking forward, demand in the economy is projected to be weaker in 2023 and the rate of inflation is expected to decline gradually.
“However, the rate of price rises is still expected to exceed the two per cent target when averaged over the year, with annual consumer spending being squeezed as a result.”