Soaring prices have dealt a sharp blow to consumer confidence in Northern Ireland, according to a new survey from Danske Bank.
Its Northern Ireland Consumer Confidence Index showed inflationary pressures had eroded confidence across the board with consumers feeling less confidence about their current finances, future finances, job security and expected spending on expensive items.
The report comes after the UK inflation rate hit a multi-decade high of 9.4% in June – the month the survey was carried out – on the back of rising energy prices.
“This high inflation was the largest driver of the fall in consumer confidence and, looking forward, it’s likely that consumer price inflation will rise even higher with price pressures further up the supply chain also at elevated levels,” Danske Bank Chief Economist Conor Lambe, said.
The bank’s Northern Ireland Consumer Confidence Index fell to 103 in the second quarter of 2022, down from 117 in the first quarter and down from 149 in the second quarter of 2021.
Over half of those surveyed said their finances had deteriorated in the last year, with only 20% feeling in a stronger financial position. Similarly, 55% expected their finances to worsen in the coming 12 months and only 19% expect them to improve.
However, job security remains relatively strong with two thirds feeling relatively secure in their current role, a reading which reflects the fact unemployment in the province remains at an historically low level.
Looking further ahead, Mr Lambe said consumers are expected come under further pressure in the coming months.
“Given the higher prices currently being experienced and the expectation that inflation could move even higher, it’s likely that consumer spending in Northern Ireland and the wider UK will become increasingly squeezed,” he said. “As such, the performance of the overall economy is expected to soften as we move through the remainder of 2022 and into 2023.”
