Soaring prices and rising inflation have seen consumer confidence toppling here, according to one new survey.
It declined sharply in the first quarter of this year as high inflation put pressure on household finances, according to analysis from Danske Bank.
More than a third of people here said the impact of higher prices on their household finances had dented confidence.
This was followed by 18% of people who pointed to global risks, including the war in Ukraine, as a factor that made them feel less confident, while 15% pointed to the post-Brexit trading arrangements in Northern Ireland.
The Danske Bank Northern Ireland Consumer Confidence Index decreased to a reading of 117 in the first quarter of 2022, down from 134 in the fourth quarter of last year, and also below the reading of 137 posted in the first quarter of 2021.
But compared with the previous quarter, respondents to Danske Bank’s survey in March reported feeling less confident about their current finances, future finances, and their expected spending on expensive items. But confidence around job security increased slightly.
And when asked what had the largest positive impact on their confidence levels, 34% of people highlighted the rollout of the coronavirus vaccine programme and 27% of those who responded cited the easing of coronavirus restrictions as having a positive impact on them.
In the latest survey, 42% of people felt their financial position had deteriorated over the previous 12 months, with 21% saying their finances were in a better position.
Asked about their future finances, 43% of those surveyed expected their financial position to worsen over the next year, compared with 18% who believed their finances would be in a better position in 12 months’ time.
“In terms of spending, 38% of respondents said they expected to spend less on expensive items over the next year, compared with 26% who anticipated spending more,” it says.
“Expectations around job security were slightly more positive as 13% of people expected to become more secure in their jobs, 61% expected no change in job security and only 8% thought their job security would worsen.”
Conor Lambe, Danske Bank chief economist, said: “In Northern Ireland and the wider UK, consumer spending accounts for a considerable proportion of economic activity and is therefore an important driver of economic growth.
“Inflation has already increased sharply and is likely to rise even higher in the months ahead, exerting a further squeeze on consumer spending.
“Economic output is still expected to grow this year but it’s important to recognise that there are significant headwinds, including high inflation and lower confidence levels, currently facing the Northern Ireland economy.”