Northern Ireland’s £600 million budget “black hole” may be starting to hit consumer confidence levels according to a new report which looks at the financial position of local households.
The Danske Bank Consumer Confidence Index highlights that consumer confidence has fallen back during the second quarter of the year to the same level it was in June 2014.
Angela McGowan, the bank’s chief economist, said although the North’s economy is still expanding she believes that both national and local events may have had some unsettling effects on household finances.
“The outcome of the UK election and its ramifications for further austerity over the next five years could be reflected in this recent survey. In addition, the £600 million black hole in Northern Ireland’s budget combined with fines from Treasury and the negative consequences of these for local public services may be starting to impact on local confidence levels.
“It remains to be seen if this is a one off blip in the index because of the UK election or the beginning of a downward trend for the region because of local public spending constraints,” Ms McGowan said.
The survey highlights that consumer confidence has fallen right across Northern Ireland but that Belfast city remains the most confident region followed by the North West. The lowest levels of consumer confidence were displayed in Carrickfergus and Antrim.
The younger generation in the North - in the 16-22 age group - remain the most optimistic about their future finances while pensioners are the least and professional or skilled workers are significantly more positive about their financial prospects than semi-skilled and unskilled workers in the North.
But in general according to Ms McGowan when it comes to expectations for spending there is a distinct lack of enthusiasm across the board for splashing out on “big ticket” items at the moment.
She said: “Unfortunately, when confidence falls, spending is one of the first things to feel the impact. It will therefore be disappointing for local retailers if footfall starts to wane - particularly when inflation is low and real wages are finally starting to rise.”
