The first signs of an easing in the pressure on household finances from inflationary pressures has emerged in the latest consumer confidence survey from Danske Bank.
It reported a slight increase in the fourth quarter of last year, although it remains at relatively low levels, the bank said. Respondents to the survey, which was carried out in December 2022, reported feeling more confident about their future finances, as well as their expected spending on expensive items but worries about job security and current finances remain.
The recent rise in prices continues to be the main issue weighing on confidence and, although expected to fall further in the coming months, household finances will likely remained strained, Danke’s Chief Economist and Head of Strategy Conor Lambe said.
“As we move through 2023, inflation is expected to continue declining but it will likely take some time for it to return to the 2 percent target,” he said. “As such, and when combined with relatively low confidence levels, consumer spending is projected to remain under pressure.”
In detail, the bank’s Northern Ireland Consumer Confidence Index rose slightly to 95 in the fourth quarter of 2022, up from 92 in the third quarter of the year, but significantly below the reading of 134 posted in the fourth quarter of 2021.
Asked what had the largest negative impact on their confidence levels, 40% of respondents pointed to the impact of higher prices on household finances while 14% highlighted the performance of the local economy. For another 14%, rising interest rates had the largest negative impact on sentiment.
