The latest analysis undergone by the Danske Bank has shown that consumer confidence has been badly dented by higher prices and inflation, which has put ever greater strain on household finances. A third of people said that their confidence in buying goods and services had been affected by these issues, whereas 18% pointed to the war in Ukraine and the uncertain global situation as having an impact on them, and a further 15% pointed to the ongoing issues involving Brexit and the implementation of the Protocol as a factor in their consumer confidence.
Consumer Confidence Level Falls
The Danske Bank Northern Ireland Consumer Confidence Index fell to just 117 in the first quarter of this year, whereas it had a reading 134 in the last quarter of 2021. One positive note gleaned from the analysis is that the roll-out of the Covid vaccine programme has given many people greater confidence, allied to the easing of restrictions which we are all thankful for. But over 40% of people believed that their financial circumstances had worsened over the last 12 months and they expected it to worsen further during the next year.
Respondents Expecting To Spend Less
As copied from the website Ulster Business the survey said that:
“In terms of spending, 38% of respondents said they expected to spend less on expensive items over the next year, compared with 26% who anticipated spending more,
“Expectations around job security were slightly more positive as 13% of people expected to become more secure in their jobs, 61% expected no change in job security and only 8% thought their job security would worsen.”
Consumer Spending An Important Driver Of Economic Growth
And in the same article, Conor Lambe, Danske Bank chief economist, is quoted as saying:
“In Northern Ireland and the wider UK, consumer spending accounts for a considerable proportion of economic activity and is therefore an important driver of economic growth.
“Inflation has already increased sharply and is likely to rise even higher in the months ahead, exerting a further squeeze on consumer spending.
“Economic output is still expected to grow this year but it’s important to recognise that there are significant headwinds, including high inflation and lower confidence levels, currently facing the Northern Ireland economy.”
Low consumer confidence is always a big worry for business so let us hope that some stability prevails soon so that confidence can be restored and maybe shoppers will have a little more money in their pocket to spend.