Vaccine rollout boosts consumer sentiment in North in Q1
Confidence about finances, job security and spending on expensive items increases
“Our survey showed the continued rollout of the coronavirus vaccine programme was a key driver behind the rise in sentiment in the first quarter of the year,” said Danske Bank chief economist Conor Lambe.
Consumer confidence in Northern Ireland lifted in the first quarter of the year as the vaccine rollout boosted sentiment.
The Danske Bank Northern Ireland Consumer Confidence Index rose to 137 in the first three months of 2021, up from 124 a year earlier, as confidence about current and future finances, job security and expected spending on expensive items increased.
The biggest factor in increasing confidence levels was the Covid-19 vaccination rollout, with 49 per cent of people surveyed citing the programme as reason for their optimism.
“This latest rise in consumer confidence in Northern Ireland is a welcome development and our survey showed that the continued rollout of the coronavirus vaccine programme was a key driver behind the rise in sentiment in the first quarter of the year,” said Danske Bank chief economist Conor Lambe.
The new post-Brexit trading issues hit confidence levels, with 33 per cent saying the arrangements had a negative impact, while higher prices and the performance of the local economy also featured.
Mr Lambe said he expected the gradual easing of the coronavirus restrictions and the reopening of the consumer-focused sectors of the economy to lead to a rise in household spending over the coming months, with an accompanying bump to the local economy from the second quarter of the year onwards.
Looking ahead, about a quarter of people felt their financial position would improve, compared to 21 per cent who thought it would deteriorate. Some 15 per cent said their job security would worsen; only 10 per cent expected increased security.
More than a third of people said they would spend less on high-value items over the next year, with 31 per cent expecting to increase their spending.
“While we expect a rise in overall consumer spending as the economy reopens, it’s important to note that some people are likely to behave cautiously with regards to their spending levels,” Mr Lambe said. “There is still considerable uncertainty around the future path of the pandemic, unemployment is projected to rise this year and people who have been furloughed may have seen their income squeezed, so some consumers may be less willing to spend than others.”