Consumer nerve is back after recession
Northern Ireland consumers are at their most confident since the peak of the recession, according to a survey released today by Northern Bank.
The bank’s Consumer Confidence Index showed the nerve of consumers has been boosted by improvements in their own finances and an expectation that they will soon be in a position to save more and spend more of their hard-earned cash.
Far fewer of the consumers surveyed were expecting their finances to deteriorate in 2010 — from 49% in the third quarter of 2008 when the recession was at its worst, to just 20% in the latest survey.
Angela McGowan, the bank’s chief economist, said economic conditions had contributed to some encouraging signs among the key indicators for consumer confidence.
“Low interest rates over the last year have certainly played an important role in how well people perceive themselves to be managing financially.
“Lower mortgage payments for those households on tracker mortgages combined with overall lower prices in 2009 have led to a reduction in the proportion of people feeling financially worse off in December compared to one year ago.”
Ms McGowan added: “Spending expectations showed a marked improvement although 28% of consumers still plan to spend less.
The survey also shows a determination amongst households to improve their finances with expectations of the amount that they will save rising overall.
“As household balance sheets improve there is an expectation that both saving and spending should return to more sustainable levels.”
Yet consumers were guarded in their hopes for future finances and job security.
A 4% fall in the number of households who thought their financial position would get worse in the next year was offset by a decline in the households who thought their financial position would get better.
Some people’s sense of job security had improved — but just over a tenth of people thought their future employment would become less secure in the next 12 months.