Strong labour market helps restore confidence of Northern Ireland consumers: survey
Consumer confidence in Northern Ireland recovered in the first three months of 2019 on the back of the strong performing labour market, a new survey out today suggests.
The Danske Bank Northern Ireland Consumer Confidence Index showed an improvement in the first quarter after a dip over the Christmas period.
But the quarterly analysis suggests that confidence among consumers during the first three months of the year still fell below the first quarter of 2018.
The survey, carried out by Belfast market research company Cognisense, was based on the views of 1,000 people across Northern Ireland during March.
Consumers were asked to compare their financial position to 12 months ago and whether they anticipate any change in their household financial position over the coming year.
They were also asked about job security and expected spend on high value items, such as holidays and furniture in the next 12 months.
In all areas the index showed an improvement in confidence from the Christmas period through to March this year, but still below the index from the first quarter of 2018.
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Some 28% of respondents placed the political stalemate at Stormont as having the biggest negative impact on their financial confidence.
Another 22% identified the lack of progress over Brexit, up from 17% at Christmas. The survey also showed that despite the freeze on interest rates, rising prices remain a cause of concern for many consumers.
Danske Bank chief economist Conor Lambe said at a time of high uncertainty around Brexit, the labour market had helped instil confidence.
"The latest official figures show that the employment rate in Northern Ireland is at a series high, the unemployment rate is the joint lowest on record and businesses have been adding more employees every quarter since the start of 2016," he said.
"Economic theory would suggest this relatively strong performance should put upward pressure on earnings growth and our survey is showing that to be the case. Some 28% of respondents said rising wages was the factor that had the largest positive impact on their confidence levels.
"In addition, the part of our index that looks at how people feel about their job security posted its highest reading since the survey began over a decade ago."
However, he added: "In both 2017 and 2018, consumer confidence increased strongly in the first quarter but then weakened in the following quarters.
"Whether a similar trend can be avoided in 2019 will likely depend on whether the labour market remains in relatively good shape, the new political talks can lead to the restoration of the Executive and the Brexit process evolves over the rest of the year."