Brake on car sales may signal an end to Northern Ireland spending recovery
The recovery in consumer spending in Northern Ireland appears to have stalled after figures revealed a year-on-year drop in car sales.
There were 3,843 new cars bought in Northern Ireland in August, according to statistics from the Society of Motor Manufacturers and Traders (SMMT).
That was a fall of nearly 3% on August 2013, and was the first blackspot in 18 months of the revving-up of car sales here.
However, sales in the year to date were still 10% higher than they were in the first eight months of last year, according to the study.
There have been 41,608 new motors sold this year so far, compared to 37,762 over the same period in 2013.
And the Ford Fiesta, Volkswagen Golf and Ford Focus – in that order – were the top three best-selling cars in Northern Ireland.
But Ulster Bank chief economist Richard Ramsey said the year-on-year drop in August could show that purse-strings were being tightened.
Mr Ramsey added: "New car sales was probably the first economic indicator to highlight the beginning of Northern Ireland's economic recovery early last year.
"Over the period from February 2013 to July 2014, Northern Ireland reported 18 consecutive months of year-on-year growth and recouped 43% of the decline in new car sales that occurred between 2007 and early 2012.
"However, the August sales figures reveal that the local consumer recovery may have stalled.
"New car sales are the most tangible barometer of consumer confidence."
While Northern Ireland was posting its first year-on-year decline in quite some time, Scotland, Wales, England the Republic recorded higher levels of sales.
With a jump in its sales of nearly a third, the Republic enjoyed the biggest jump – though Mr Ramsey said the increase followed "extremely low" sales the previous year.
He added it was not clear if the August fall was a "blip, rather than the start of a meaningful slowdown".
However, Northern Ireland was still 18% below its 2007 levels of sales, and the Republic was selling barely half as many new cars as it did during the boom.
But Colin McNab, group operations director at car retailer Charles Hurst, which is part of Lookers plc, said August was "a really difficult month to call. I don't yet see that the latest data represents any real change in overall growth predictions," he added.
"For us, retail inquires were marginally down in August when compared to last year, while interest in fleet vehicles was up.
"That said, September is traditionally a much stronger month for the market in general – particularly in Great Britain when car plates change – and as a result I will be keenly watching the next round of figures."
Problems associated with the move of Driver and Vehicle Agency operations from Coleraine to Swansea in Wales could also have contributed to the fall-off, he added.