Consumer confidence on the rise following vaccine news

  • New stats from Danske Bank showed a significant increase in Northern Ireland's consumer confidence levels at the end of 2020 following news of vaccine approval, but we're not quite back to pre-pandemic levels yet.

    Northern Ireland has been vaccinating people at an impressive pace throughout January and February, but news of successful vaccine trials was hitting us as early as November last year. The fourth quarter of 2020 is an important moment to study because it's the first time since the pandemic began that we knew a vaccine was finally on the way.

    The Danske Bank Northern Ireland Consumer Confidence Index showed an increase in Q4 2020 from a score of 119 to 124, a significant jump for a single quarter. The data comes from surveys carried out in December, so it shows the effect of the vaccine announcements and pre-Christmas period on consumer confidence.

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    The index tracks variables relating to how secure people feel in their financial situations, their prospects for the future, job security, and future spending plans on significant purchases. Q4 2020 saw a jump in people's confidence about their future financial positions and the amount the expect to spend on expensive items, but job security was still a major concern.

    Around 16% of those surveyed said they expected their job security to decline as the pandemic dragged on, while only 7% expected their jobs to become more secure in the near future. A large number of people surveyed (29% in total) believed their finances had deteriored over the previous year, and only 18% expected their financial position to improve over the next year.

    News of a coronavirus vaccine was cited by 44% of respondents as the main positive impact on their confidence levels, with 13% citing covid restrictions were a significant positive influence and 8% attributing their positive outlook to government support such as the furlough scheme.

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    Negative factors impacting people's confidence included ongoing covid restrictions (highlighted by 22% of respondents), the status of Brexit negotiations which weren't resolved in December with just days to go (17%), and the UK government's long-term Brexit objectives (12%).

    Another big take-away from the data is that a surprising 21% of people expect to spend more on expensive items in the near future, and around 42% said they expect to spend less on high-value items over the next year. Some people have been saving for holidays when the pandemic is over or other major purchases, while a large number of people have been forced to raid their savings during the pandemic.

    Danske Bank Chief Economist Conor Lambe commented: "With the current restrictions requiring many businesses to remain closed, the first quarter of 2021 is proving to be another challenging one for the Northern Ireland economy. But assuming that the restrictions can be gradually eased throughout the year as coronavirus case numbers hopefully come down and the vaccine programme is rolled out further, the local economy is expected to return to positive rates of growth from the second quarter of 2021 onwards."

    Source: Written based on press release

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    Brendan is a Sync NI writer with a special interest in the gaming sector, programming, emerging technology, and physics. To connect with Brendan, feel free to send him an email or follow him on Twitter.

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