Sunday, March 3, 2024

Report reveals almost half of NI consumers say their financial situation worse now than year ago

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The January Credit Union Consumer Sentiment report today found that while consumer confidence has improved marginally, continuing a yearly trend, NI consumers remain more cautious than their counterparts in the UK and the Republic of Ireland.

Nearly half of respondents said their financial situation is worse now than it was a year ago, while only 20% believe it is better.

The findings suggest that while there has been some easing on fuel costs, cost-of-living pressures remain high for households.

And recent public sector strikes had emphasised the ongoing squeeze on households’ spending power and the challenging wider economic climate.

But a slight uptick in consumer confidence, bolstered by some easing in cost pressures, contributed to a pick-up in spending plans — helped by price cuts in the post-Christmas sales.

Martin Fisher, NI manager of the Irish League of Credit Unions, said: ‘It is encouraging that NI consumer confidence has shown a slight increase in recent months, continuing the trend seen through most of the past year.

“The pick-up in spending that we see in the survey is also reflected in the increased enquiries credit unions are getting as people begin planning their summer holidays.”

The survey, which was conducted before the return of power-sharing, found that despite being more positive than last year, consumers are split on future economic prospects.

When asked about their own financial situation over the next five years, 42% said they expect things to get worse.

And nearly 40% of consumers surveyed said they thought unemployment would rise, while close to a third said that it would fall over the next 12 months.

In the survey, opinion was almost evenly divided as to whether NI house prices would rise or fall in the next five years, with 37% anticipating an increase and 35% expecting a fall.

Respondents told the survey that they see the NI economy facing lasting difficulties, with only one in four consumers expecting the economy to be stronger in five years’ time.

Mr Fisher added: “Our survey was conducted prior to the restoration of the NI Assembly, which I expect will impact positively on consumer confidence and it will be interesting to see how that will be reflected in our next quarterly survey.”

Economist Austin Hughes said: “My sense is that the smaller uptick in consumer sentiment in NI than elsewhere of late may owe something to a less pronounced easing in fuel costs as well as the sharp focus that recent public sector strikes have put on living cost pressures and the difficulties arising from the two-year hiatus when power-sharing was suspended.”

The report added that despite an increase in redundancy announcements during 2023, the outlook for employment is less negative than last year.

It added that despite sentiment, economic activity in NI last year translated into continued gains in employment.

“This positive growth in employment hasn’t fully translated into mainstream thinking, and continuing mixed news on the jobs front means NI consumers remain nervous,” said Mr Hughes.

“However, fears are gradually easing. Although more consumers still expect unemployment to rise than think it will fall, the balance of thinking on the outlook for jobs is far less negative than it was 12 months ago.”

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