Consumer confidence in Northern Ireland saw a strong rebound during the first quarter of 2015 as consumers enjoyed low inflation and an improving labour market, according to the latest Danske Bank report published today.
The bank’s Consumer Confidence Index looks at the financial position of local households and their expectations for the year ahead.
The latest report shows that the index experienced a strong rise during Quarter 1, bringing it to the highest point since the survey began in 2008.
The index moved up five points to 136 in the first quarter and was four points higher relative to the same period in the previous year. In the last five years the index has averaged 114.
“There have been a number of improvements in the wider economy that have supported household confidence levels in the early part of this year,” said Danske chief economist Angela McGowan.
“In the first instance, low inflation has helped to strengthen disposable incomes and rising house prices have also made home-owners feel wealthier.
“The local labour market has also improved, with 1,454 new jobs announced during January-March this year and the number of unemployment claimants continuing to fall in the same period.”
The latest improvement was supported by an improvement in all aspects of the survey but the biggest rise was in spending expectations, which increased by 10 points during Q1.
Spending expectations rose to 136 in Q1 from 126 in the previous quarter. In the latest survey male respondents finally caught up with females when it came to spending expectations, with 19 per cent now planning on spending more compared with only 13 per cent before.
In terms of financial expectations, the index rose to 165 from 158 in Q4.
While the majority of respondents (65%) believed that their financial situation will remain steady in the next 12 months the overall improvement in the latest quarter came from a declining number of negative responses. There was a steady fall in the proportion of households expecting their finances to deteriorate - falling from 17 per cent in the last quarter to 14 per cent in Q1 this year.
There was also a marginal rise in positive responses with the proportion of households expecting their household finances to improve rising to 18 per cent in the quarter from 17 per cent at the end of 2014.
“Overall we are seeing a marked improvement in general consumer confidence levels across Northern Ireland,” said Ms McGowan.
“The fact that the index is now sitting at the highest level since the economic crisis began augers very well for economic growth in the year ahead.
“Rising consumer confidence generally has a positive knock-on effect on the business sector because firms expect more stable demand and subsequently become assured enough to increase investment and employment levels.”