Cautious optimism as sales of new cars step up a gear
Sales of new cars in Northern Ireland accelerated in July despite overall new registrations in 2015 loitering in the slow lane.
According to figures from the Society of Motor Manufacturers and Traders (SMMT), 4,226 new cars were registered last month, compared to 4,159 in July 2014.
This represents a month-on-month rise of 1.61%.
However, only 37,635 new cars have been registered in 2015 to date, compared to 37,765 in January to July 2014 - a drop of 0.34%.
Northern Ireland's most popular make of new car was again the Ford Fiesta - followed by the Volkswagen Golf, then Renault Clio, Ford Focus and Nissan Qashqai.
Ulster Bank chief economist Richard Ramsey said: "The SMMT figures suggest that consumer confidence remains fairly fragile despite the recent record lows in inflation, due primarily to falling food and energy prices.
He said falling food and energy prices had boosted disposable incomes - but that rises in petrol and diesel forecourt prices since February will have had an impact on motorists.
Mr Ramsey added: "The good news is we are likely to see this trend go into reverse. The fall in the price of Brent crude oil should feed through into lower petrol and diesel prices in the weeks ahead. In turn, this will boost consumers' disposable incomes.
"However, this boost will be countered by a number of factors.
"These include: significant public spending cuts, caps on public sector pay rises, cuts in welfare benefits and potential interest rate rises.
"As a result, consumer confidence is likely to remain fragile for the foreseeable future.
"Therefore any growth in new car sales in the months ahead is likely to be modest and stuck in the slow lane."
Fears about possible austerity measures is the main reason for ongoing low consumer confidence, according to recent Danske Bank research.
The bank's consumer confidence index said consumers were still not fully confident in their finances.
Only 14% of people asked by researchers said they would be prepared to purchase 'big ticket' items such as cars and white goods.
Danske Bank chief economist Angela McGowan said fears of further austerity following the general election, as well as the £600m black hole in Northern Ireland's budget, could both be undermining consumer confidence.
The latest Northern Ireland economic outlook by business advisers PwC has forecast growth of 1.8% for Northern Ireland this year, down from 2.2% in 2014.
Relatively weak figures for car sales in Northern Ireland are in contrast to the rest of the UK where new cars sold in the first seven months of 2015 were up on 2014.
In England, new car registrations in January to July 2015 were up 7.46%.
Scotland saw an overall rise of 0.99% and Wales 2.56% on January to July 2015 sales.
But their sales in July this year were much lower than July last year - with decreases of 5.81% for Scotland and 2.52% for Wales.
New car registrations in England were up 4.42% in July, compared to July 2014.
Sales of new cars step up a gear... but consumer confidence remains fragile