Posted on Monday 20 January 2014 by Ulster Business
Based on a survey of 1,000 people, the bank's quarterly 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 rose to 123 in the last quarter of 2013, an increase from 119 in quarter three and from 110 a year previously.
Danske Bank's Chief Economist Angela McGowan said: "The latest surge in consumer confidence is consistent with a marked improvement in the wider economic environment and reflects a substantial fall in negative responses. People appear much less apprehensive about their financial future and there is a definite sense that the worst is behind us."
On average 15 per cent of those surveyed said their financial position improved over 2013 while 51 per cent believed it was the same and 33 believed their financial position had deteriorated. Full-time employees were much more positive regarding their current financial position relative to last year, with 24 per cent believing that they are now better off relative to the start of the year.
While 21 per cent of high income households felt they are better off now relative to last year, only 7 per cent of low income households agreed that they were better off.
Respondents' expectations for their finances in the year ahead also improved, up 19 points over the year. This improvement was largely driven by a decline in the proportion of households feeling pessimistic about their financial future. People in the 25-34 age group were the most optimistic with 27 per cent believing that their financial position would get better in the year ahead. Retired people were least optimistic about their future finances.
Spending expectations reached their highest level for five years in the most recent index, which was attributed to a steady fall in the proportion of people planning to spend less. Females were the most bullish when it came to spending expectations, with 19 per cent planning to spend more on big ticket items during 2014.
Expectations for savings also increased with, high income households not surprisingly showing a greater propensity to save in the year ahead, while middle and low income households indicated they are unlikely to save more of their disposable income during 2014.
Confidence around job security remained static over the quarter and over the year with the majority of people (69 per cent) believing that their job security would not change.
Ms McGowan added: "It is interesting that confidence around job security has not seen the same improvement as other parts of the survey even though the number of monthly claimants in Northern Ireland has slowly fallen over 2013. Hopefully in 2014 we will see more rapid growth in local job creation levels and a pick-up in earnings growth – we will then see consumer confidence improve further."