Belfast Telegraph

Wednesday 3 September 2014

New blow for consumer confidence

Consumer confidence has been hit hardest among those in lower socio-economic groups, according to a new study

Consumer confidence has suffered a further hit in Northern Ireland, mowing down the green shoots of optimism that emerged last year, new research has indicated.

The survey assessing the current financial position and future expectations of householders in the region makes for grim reading, with the overall confidence index falling below the average for 2012.

The bench-marked index for the last three months was 104, down from the 110 recorded in December and lower than the 12-month average of 108.

The survey, which is commissioned by Danske Bank, examines householder opinion across five key fields: financial position relative to last year; expectations for finances in the year ahead; expectations for spending; job security; and savings.

Danske Bank's chief economist Angela McGowan said confidence had dropped for all five aspects - something not recorded since mid-2011.

Ms McGowan said confidence was hit hardest among those in lower socio-economic groups. She said concerns about imminent changes to the welfare system could be a factor.

"The survey also reveals a significant gap between the confidence levels of people who are either unskilled manual workers or unemployed and those in higher socio-economic groups," she explained.

"Confidence for higher socio-economic groups fell only very marginally over the quarter, but fell significantly for lower socio-economic groups and unemployed people. With nearly 86,000 households expected to be negatively impacted by welfare reform it is not surprising that low income households have seen such a dramatic drop in confidence levels."

Ms McGowan added: "The latest consumer confidence survey underlines the significant pressures that low income households in particular are under. Confidence is clearly much lower for the unemployed, lower income groups and those in social housing.

"Northern Ireland has a much higher level of households that are dependent on welfare benefits so it is not surprising that confidence levels in the region have dropped even when household confidence in the rest of the UK is reported to have remained stable in the month of March."

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