Car sales slump puts squeeze on spending
One of the most accurate measures of economic health has revealed the Northern Ireland consumer is having to hold tight to the purse strings.
The number of new cars sold in Northern Ireland stood at 5,589 last month, a fall of 8% on September 2010, according to the Society of Motor Manufacturers and Traders (SMMT).
Northern Ireland's motor industry was the hardest hit of all UK regions and in the 12 months until the end of September new car sales are down 30% from the peak 12-month period in 2007. That means 20,920 fewer cars were sold in the year to September, relative to the 2007 boom. And the trend looks set to continue.
"The first thing consumers cut back on in a downturn is discretionary spending and the most significant discretionary expenditure item after a house is a new car," said Richard Ramsey, chief economist at Ulster Bank in Northern Ireland.
"I would expect a further fall in new car sales because public expenditure cuts haven't really hit yet and inflationary pressures, notably food and energy, continue to squeeze disposable incomes."
In the UK as a whole, the picture was a lot rosier. More than 330,000 new cars were sold across the UK last month, less than 1% fewer than a year ago, outperforming expectations.
The SMMT said the September plate-change saw 332,476 new cars registered, 0.8% down on the same month last year.
The society said 2011 would be a "challenging" year, with an expected full-year sales total of 1.92m, 5% below 2010.
Paul Everitt, the SMMT's chief executive, said: "The all-important September market outperformed expectations. We expected 2011 to be a challenging year and we are on track for a full year total of around 1.92m new car registrations, 5% below 2010.
"SMMT has revised down its 2012 registrations forecast to 1.96m units, a reflection of the continued weakness in UK domestic demand and the uncertainty across European economies.
"It is important the Government acts to sustain an investment-led recovery and implements measures to encourage more private sector investment in research and development, skills, new plants and machinery."
The Ford Fiesta was the best selling model last month in the year to date, followed by the Ford Focus.
September is the second largest month for new car sales after March, representing almost 17% of the annual market. The top best-selling cars last month were the Ford Fiesta (15,647), Ford Focus (14,754) and Vauxhall Corsa (14,339).