Consumer confidence plummets sharply in NI to a four-year low
Confidence among Northern Ireland consumers has fallen to its lowest level in four years, according to a new report.
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The latest Danske Bank Northern Ireland Consumer Confidence Index says confidence fell sharply in the last three months of 2017, down to a reading of 123.
That figure is relative to a recession reading of 100, at the end of 2008.
Danske Bank's chief economist, Conor Lambe, said: "At the end of last year, consumer confidence in Northern Ireland fell to its lowest level since the fourth quarter of 2013.
"Confidence fell very sharply in 2017 Q4, with falls observed over the quarter and over the year across all four of the sub-indices that make up the overall consumer confidence index.
"It's safe to conclude that the factors negatively impacting confidence outweighed the factors having a positive impact."
Mr Lambe said that a third of survey respondents said "political uncertainty and the lack of a Northern Ireland Executive had the largest negative impact on their confidence levels".
"It is clear that people want to see the return of the devolved institutions and so we must hope that the political parties can reach a deal sooner rather than later," he added.
"The rate of price rises also had a detrimental effect on confidence levels. Some 16% of consumers stated that the impact of high inflation on their household finances had the largest negative impact on sentiment.
"Despite the interest rate rise last November, 19% of people still highlighted low interest rates as the factor having the largest positive impact on their confidence levels in 2017 Q4."
He added: "But this was down slightly from the third quarter of 2017."
Looking ahead, consumers are also more pessimistic about their financial positions in the next 12 months, with the figures falling from a year earlier.
The majority of those quizzed expect their job security to remain unchanged over the next 12 months. But there are regional differences, with greater job security forecast in areas outside Belfast city.
"The inflation rate is expected to decrease gradually in 2018, but we are forecasting that it will remain above the Bank of England's target and average 2.6% over the year as a whole," Mr Lambe said.
"Falling inflation should see the squeeze on consumers ease a little as we go through the year, but we still expect household spending power to remain under pressure.
"The fall in this part of the index suggests that consumers have similar expectations."