Belfast Telegraph

Brexit fears and lack of Executive hitting consumer confidence

Danske Bank chief economist Conor Lambe
Danske Bank chief economist Conor Lambe

By Michael McHugh

Consumer confidence in Northern Ireland has fallen amid Brexit uncertainty, a survey has found.

Around a quarter of those canvassed felt the EU withdrawal weighed on the level of optimism, Danske Bank said.

The bank's NI Consumer Confidence Index fell to 136 in the second quarter of this year - down from 139 in the first quarter of the year but above that registered in the second quarter of last year.

Danske Bank chief economist Conor Lambe said: "With a new Prime Minister in place, the Brexit process is likely to dominate UK politics in the weeks and months ahead.

"This survey continues to show that, like the business community, consumers also have concerns around how the UK will leave the EU.

"The outlook for consumer confidence, and overall economic growth in Northern Ireland over the rest of this year and into next year, will be heavily dependent on how Brexit unfolds and whether a no-deal can be avoided."

After rising on the back of the strong labour market at the start of 2019, consumer confidence fell back in the second quarter.

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Mr Lambe added: "The main areas of concern for local people continue to be the lack of an Executive and Brexit - 39% of people said that the fact we haven't had a functioning devolved government in two-and-a-half years was the issue that had the largest negative impact on how they were feeling.

"With regards to leaving the EU, 14% of people stated that progress during the Brexit negotiations in recent months negatively impacted them and a further 10% highlighted the UK Government's longer-term Brexit objectives as the main factor that weighed on their confidence levels."

He said confidence in the second quarter of this year was higher than in the same period of 2018.

"This was likely due to the fact the labour market was still providing some upward support to consumer sentiment," he explained.

"The latest labour market figures for March-May 2019 showed that, when compared with the same period last year, the employment rate was higher, the unemployment rate was lower, and the economic inactivity rate was also lower.

"A quarter of the respondents to our survey said that rising wages was the factor that had the largest positive impact on their outlook in the second quarter of the year."

Belfast Telegraph