High expectations as Northern Ireland consumer confidence rises in quarter one
Low interest rates and rising house prices are partly behind a boost in consumer confidence in the first quarter of 2018, according to a new survey.
The Danske Bank NI Consumer Confidence Index registered a reading of 142 in the first quarter of 2018, up a "significant" 19 points on Q4 2017, and up slightly from the same quarter last year.
Confidence in current and future household finances, job security and expected spending on big ticket items were also on the rise in comparison to the last quarter.
Danske Bank chief economist Conor Lambe welcomed the new stats following a disappointing end to 2017.
He said: "Consumers started this year feeling more confident about their current financial position, how they expect their financial position to change, their job security and the amount they expect to spend on big ticket items.
"Eighteen per cent of consumers highlighted low interest rates as the factor that had the biggest positive impact on their confidence levels, while 10% signalled that rising house prices made them feel more confident. However, despite the sharp rise in our consumer confidence index, almost 40% of people weren't sure which individual factor had the biggest positive impact on them.
"As has been the case for a number of quarters now, more than 30% of consumers we surveyed continued to identify political uncertainty and the lack of an Executive as the factor that had the largest negative impact on their confidence levels."
Meanwhile a sub-index based on consumers' sentiments for their current financial position registered a reading of 144 in Q1 2018, up significantly from 124 in Q4 2017, but lower than the 147 recorded in the Q1 2017.
Looking ahead, the component of the index that examines households' expectations of how their financial position will change over the next 12 months increased.
And there was optimism among households in relation to job security as it rose for the first quarter of 2018.
It was, however, full-time workers who felt the increased hope most.
Some 21% of full-time workers expected to become more secure in their job over the next year compared with 17% of part-time workers. Only 6% of full-time workers thought their job security would deteriorate, but the proportion among part-timers was 11%.
While the majority of respondents didn't expect their job security to change, some differences in the size of the majority existed at a regional level. 75% of respondents in South region, and 76% of people in West region expected their job security to remain the same. In Belfast however, the proportion was lower at 64%.
Spend on high ticket items was another area in the survey that experienced a rise. Some 24% of consumers expect to spend more on items, such as furniture and holidays, over the next 12 months registering a reading of 148, higher than Q4 2017's 130.
Meanwhile 12% of consumers surveyed expected to save more over the next 12 months than they did last year.
Mr Lambe added: "The latest data shows that inflation in the UK fell from 3% in December 2017 to 2.5% in March 2018.
"This lower rate of inflation is good news for consumers as it likely signifies the early stages of the household spending squeeze easing.
"However, a word of warning still needs to be sounded. Households are likely to continue to face some pressure as any returns to positive real wage growth are expected to be modest.
While consumer spending growth rates in Northern Ireland are expected to rise slightly, they are forecast to remain below 1% in 2018 and 2019."