Consumer confidence in Northern Ireland hits highest level since financial crisis

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1 Press Release EMBARGOED UNTIL APRIL 10, 2015 Consumer confidence in Northern Ireland hits highest level since financial crisis Consumer confidence in Northern Ireland saw a strong rebound during the first quarter of 2015 as consumers enjoyed low inflation and an improving labour market, according to the latest Danske Bank report published today. Danske Bank s Consumer Confidence Index looks at the financial position of local households and their expectations for the year ahead. The latest report shows that the index experienced a strong rise during Quarter 1, bringing it to the highest point since the survey began in The index moved up five points to 136 in the first quarter and was four points higher relative to the same period in the previous year. In the last five years the index has averaged 114. Commenting on the latest movement in the Index, Danske Bank s Chief Economist Angela McGowan said: There have been a number of improvements in the wider economy that have supported household confidence levels in the early part of this year. In the first instance, low inflation has helped to strengthen disposable incomes and rising house prices have also made home-owners feel wealthier. The local labour market has also improved, with 1,454 new jobs announced during January-March this year and the number of unemployment claimants continuing to fall in the same period. The latest improvement in the Danske Bank Confidence Index was supported by an improvement in all aspects of the survey but the biggest rise was in spending expectations, which increased by 10 points during Quarter 1 this year.

2 Spending Expectations This aspect of the index rose to 136 during Quarter 1 from 126 in the previous quarter. In the latest survey male respondents in Northern Ireland finally caught up with female counterparts when it came to spending expectations, with 19 per cent of males now planning on spending more compared with only 13 per cent in the previous quarter. The most optimistic age-group in terms of future spending plans was the year old cohort, with 27 per cent of those surveyed planning to spend more on big-ticket items, up from 19 per cent in the previous survey. However, there remained a marked difference in the spending plans for higher income households compared with low income households, with 26 per cent of the higher income households planning to spend more on average but only 9 per cent of low income households anticipating higher spending in the year ahead. Expectations for Finances The Expectations for Future Finances aspect of the index rose in the latest quarter to 165 from 158 in Quarter 4. While the majority of respondents (65 per cent) believed that their financial situation will remain unchanged in the next 12 months the overall improvement in the latest quarter came from a declining number of negative responses. There was a steady fall in the proportion of households expecting their finances to deteriorate - falling from 17 per cent in the last quarter to 14 per cent in Quarter 1 this year. There was also a marginal rise in positive responses with the proportion of households expecting their household finances to improve rising to 18 per cent in the quarter from 17 per cent at the end of Young people in the age group remained the most optimistic with regard to their expectations about future finances. Some 30 per cent of young people believed their finances will improve in the year ahead and only 12 per cent believed that their finances would deteriorate. Financial Position now relative to 12 months ago

3 The Quarter 1 survey saw a steady improvement in household perceptions around their current financial position compared to one year ago. Again, this improvement was mostly driven by a declining number of negative responses. The proportion of people who believe they are financially worse off relative to one year ago has now fallen from a record high of 49 per cent in March 2011 to 21 per cent in the latest survey. For higher income households, negative responses fell from 22 per cent to 16 per cent. There was also a significant decline in the proportion of lower income households that believed their financial position has deteriorated over the last year, from around one in three households (32 per cent) to one in four households (25 per cent) in that latest quarter. Pensioners were also significantly less pessimistic in this survey, with only 15 per cent believing they were worse off relative to last year, compared with 21 per cent in the previous survey. Job Security During Q1 the majority of people (73 per cent) believed that their job security would be unchanged in the next 12 months, while 9 per cent believed that their job security would improve. The proportion of people who believed that their job security would deteriorate or who were uncertain about job security amounted to 18 per cent. Regional Trends The highest confidence levels were observed in Belfast City in the first quarter. At 154, the sub-regional index in Belfast was significantly above the Northern Ireland average. The lowest confidence levels were recorded in the North region where the sub-regional index score was 126, this includes Carrickfergus, Antrim, Ballymena, Larne and Ballymoney. Conclusion Ms McGowan commented: Overall we are seeing a marked improvement in general consumer confidence levels across Northern Ireland. The fact that the index is now sitting at the highest level since the economic crisis began augers very well for economic growth in the year ahead. Rising consumer confidence generally has a positive

4 knock-on effect on the business sector because firms expect more stable demand and subsequently become assured enough to increase investment and employment levels. ENDS For further information, or to arrange an interview with Angela McGowan, please contact Rebecca Kincade at MCE Public Relations on or Notes to Editors: The study was carried out by Millward Brown in March 2015 with 1,000 people. It is statistically representative of the Northern Ireland population with a variance of -/+ 3 per cent. The Consumer Confidence Index for Northern Ireland examines four key areas which include information on personal finances compared to 12 months ago, as well as consumers expectations for spending, job security and their general financial position over the next 12 months. In addition, the survey gathers information on household savings. The Consumer Confidence Index for Northern Ireland published by Danske Bank is the first of its kind to be made available locally. More information from:

5 Rebecca Kincade, MCE Public Relations E: T: / Andrew Kelly, MCE Public Relations T: E: