Vaccine rollout boosts consumer sentiment

[7th May] Almost one million people in Northern Ireland have now received their first Covid-19 vaccination, with over 15,000 doses administered on 6th May alone. In total, 1.4 million doses have been given, almost double the initial targeted amount (HSCNI).

It’s unsurprising that this has boosted consumer confidence in NI for the first quarter of 2021. The Danske Bank NI Consumer Confidence Index rose to 137 in the first three months of 2021, up from 124 the previous year. Almost half (49%) of those surveyed said the vaccine programme was a reason for their optimism, and confidence around current and future finance, job security and expected spending on high value items increased.

25% expect finances to improve

Conor Lambe, Danske Bank Chief Economist said: “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,”

Post-Brexit trading issues hit confidence levels, with 33% feeling the new arrangements have a negative impact. Looking ahead, about one in four people feel their financial situation will improve, with 21% feeling it may deteriorate.

Concerns over job security exist too, with only 10% feeling more secure in roles and 21% concerned their situation may worsen.

31% to increase spending

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.”