Consumer sentiment is gradually improving in the north, despite a large proportion of households still feeling worse off than last year.
Some 40% felt their financial situation in August 2024 was worse than 12 months earlier, according to the latest quarterly research from the Irish League of Credit Unions.
Just one-in-four (25%) felt better off compared to last year.
But the longer term trends do point to a slowly improving picture.
Some 56% said they felt worse off when asked the same question in August 2023, while 21% said they were in a better position.
Optimism remains weak, albeit moderately improving.
Just over one-in-four northern consumers (28%) believe their financial position will get better over the coming year, up from 20% in November 2023.
But one-in-three (34%) still anticipate their financial situation will deteriorate in the year ahead.
While that was up on the 29% who said the same in the May 2024 survey, it’s well down from the start of January 2023 (51%).
The Credit Union survey also suggests many consumers are still reluctant to spend big.
Just 9% thought August 2024 was a good time to purchase big ticket items, while 24% said it was a bad time.
Economist Austin Hughes said while inflation has eased and pay growth has picked up materially in the past year, the cumulative increase in living costs over recent years could mean households are at their limit or reaching it.
“The clear message of the sentiment survey is that financial pressures on Northern Ireland households and uncertainty about the economic outlook remain major concerns, even if there are also encouraging signs that conditions show a clear improvement of late from the difficulties of recent years,” he said.
“In coming months, consumer confidence may be heavily influenced by how much energy bills rise over the winter.”
Martin Fisher from the ILCU said while the gradual improvements are to be welcomed: “The future hesitancy noted in the research is understandable given ongoing cost of living pressures and potential seasonal increases as well as anxiety around what the autumn statement from the Chancellor might bring.
“Our member credit unions are there to support individual members to manage these pressures and plan for positive occasions.
“Looking to the rest of the year and beyond, we will continue to engage with Government and relevant stakeholders to support the growth of credit unions, aligned to their role in Northern Ireland’s economic development.”
