Brexit blamed for further spending drop

The Danske Bank Northern Ireland Consumer Confidence Index fell to 131 in Q3 2019, down from 136 in the second quarter of the year but above the reading of 123 posted in the third quarter of 2018.

Danske Bank Chief Economist Conor Lambe, said: “This latest quarterly fall in consumer confidence can be put down to the same old culprits – Brexit and the local political impasse. When our survey took place in September, Brexit-related uncertainty was at heightened levels and so the relatively high proportion of people citing the UK’s exit from the EU as a drag on their confidence levels was to be expected.

“Twenty-three per cent of respondents said that the progress during the Brexit negotiations in recent months had the largest negative impact on how they were feeling, while a further nine per cent highlighted the UK Government’s longer-term Brexit objectives as a factor adversely impacting them. It’s clear that how the Brexit process develops over the coming days and weeks will have a significant impact on consumer confidence levels during the rest of 2019 and beyond.

“In addition to Brexit, more than a quarter of people pointed to the ongoing political stalemate at Stormont as something which put a dent in confidence in quarter three.

“However, there were some factors which had a positive effect on consumer sentiment. Around one fifth of people said that rising wages had a beneficial impact on them and 11 per cent of people stated low interest rates positively affected how they were feeling.”

“Throughout this year, consumer purchasing power has been relatively robust due to stronger rates of wage growth and more moderate inflation. For businesses in consumer-focused sectors – such as retailers, hotels and restaurants – confidence levels will be an important determinant in the months ahead when it comes to how willing people are to convert that purchasing power into actual increases in consumer spending.”