Landmark Study Finds Consumers 'Less Pessimistic'

Results of a landmark study into consumer confidence in Northern Ireland show that consumers outlook for the year ahead is now less pessimistic than it was three months ago, according to a leading economist.

The 'Consumer Confidence Index for Northern Ireland' published by Northern Bank, which is the first and most extensive examination of local consumer sentiment, shows that for the first time in recent months there has been a slight decrease in the number of people who believe their financial position is now worse than twelve months ago.

Whilst the study indicates that 39% of people's financial positions are not as good as last year, it also shows that 14% of people are less pessimistic about how their household financial position will change in the next year compared with three months previous.

Angela McGowan, Northern Bank Chief Economist said: "Although it is well acknowledged that many consumers feel apprehensive about their short term prospects, the modest improvement in expectations highlighted by this study indicates that consumers are expecting their financial position to stabilise and this will be carefully monitored in the months ahead."

Ms McGowan added that the latest unemployment figures published by the government and recent job losses could potentially have a greater psychological impact in sapping consumer confidence than any other factor. The study highlights that almost 20% of consumers across Northern Ireland expressed concerns over job security prospects for the next twelve months whilst 67% expect no change.

She also said that consumer confidence has been helped to some extent by a recent fall in interest rates and energy costs but will continue to be impacted by consumers' reluctance to spend particularly on big value items.

The index finds it is unlikely that household savings will increase over the next twelve months with 41% stating that they plan to save less. Ms McGowan said that she expects the newly introduced 'Consumer Confidence Index for Northern Ireland' to provide local businesses and Government with a reliable tool for measuring and tracking consumer confidence. She added that consumers' assessment of current economic conditions and future expectations will prove to be a useful barometer of the health of the Northern Ireland economy over the next twelve months.

The 'Consumer Confidence Index for Northern Ireland' will be published on quarterly basis providing a continuous assessment of consumers’ sentiment around current and future financial circumstances.

(JM/BMcC)