Danske consumer confidence report shows fall in activity due to political instability

  • Danske Bank has published its Northern Ireland Consumer Confidence report for Q2 2019, blaming a fall in the index on political instability in the region.

    The latest Danske Bank Northern Ireland Consumer Confidence Index fell by 3 points compared to the previous quarter, indicating that consumers feel less secure about the financial positions and less able to spend. The report blames the drop on the lack of progress in establishing a working NI Assembly and the continued uncertainty surrounding Brexit.

    While consumer confidence is still higher than at the same time last year, there was a major swing this quarter in people's expectations of financial security for the future. Around 16% of people expected their finances to improve over the next 12 months, while 18% expected it to worsen. The overall trajectory compared to last year was still an upward one, likely due to the employment market adding a positive lift in finances.

    Danske Bank Chief Economist Conor Lambe commented on this quarter's index, saying: "After rising on the back of the strong labour market at the start of this year, consumer confidence in Northern Ireland fell back in the second quarter of 2019. The main areas of concern for local people continue to be the lack of an Executive at Stormont, and Brexit."

    Around 39% of respondents said that the largest negative impact on how they felt about their financial position was the lack of a functioning NI Assembly for over two and a half years. A further 14% of people stated that the lack of Brexit progress was a significant negative impact on them, and 10% were not confident in their financial security due to the UK Government’s long-term Brexit objectives. 

    “It is worth noting that consumer confidence in Northern Ireland in Q2 2019 was higher than in the same period of 2018," commented Conor Lambe. "This was likely due to the fact that the labour market was still providing some upward support to consumer sentiment. A quarter of the respondents to our survey said that rising wages was the factor that had the largest positive impact on their outlook in the second quarter of the year."

    Source: Written based on press release

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