Consumer confidence falls as worries weigh on public
Spending confidence in Northern Ireland has fallen as persistent Brexit worries and rising prices get under the skin of consumers, according to research released today.
Danske Bank said its consumer confidence index dropped by two points from the first quarter to the second quarter of the year.
Conor Lambe, the bank's economist, said Northern Ireland was sharing in a consumer squeeze which was gripping the economy across the UK.
"Factors such as Brexit-related uncertainty, which seems to have increased further following the general election, and the continued political impasse in Northern Ireland are also likely to have acted as a drag on confidence levels," he said.
The index said consumers' moods had darkened, with expectations from households of how their financial position might change over the next 12 months falling by six points.
But younger people tended to be more positive about their present finances, with 24% of 16 to 24-year-olds saying they felt better about their cash situation than the year before.
And 25 to 34-year-olds were event more positive, with more than a third saying their finances had improved.
But for anyone aged 34 and over, Danske Bank said there was a greater tendency towards a gloomy outlook, with 28% of 50 to 64-year-olds saying their current finances were worse than the year before.
Mr Lambe said rising prices in the shops were playing a part.
"Over the first six months of 2016, the average inflation rate was 0.4%," he added.
"Over the same period this year, inflation averaged 2.4%. This high inflation has led to falling real wages and is exerting downward pressure on consumers' purchasing power.
"In this environment, a fall back in consumer sentiment around current finances was to be expected."
And inflation was unlikely to ease significantly. The most recent Consumer Price Index from the Office for National Statistics was 2.6%, down from 2.7% in June.
Mr Lambe added: "Inflation is forecast to remain above target over the rest of 2017 and into next year. Wage increases are unlikely to be sufficient to push real earnings growth well into positive territory.
"Therefore, the squeeze on consumers is expected to continue and the fall in this part of the index suggests that households in Northern Ireland recognise this to be the case."
But despite the gloom over prices, most people told Danske Bank that they felt secure in their jobs.
However, people did say they were less likely to save more money over the next year. Only 8% said they would be saving more than over the last 12 months.