Consumer Confidence in NI increased in the second quarter as sentiment about spending, finances and job security improved

The bank’s quarterly Consumer Confidence Index rose by 9 points to 141 in the second quarter of the year from 132 in the previous quarter and 133 in the same period of 2024, as people also reported improved sentiment about job security and expected spending on high-value items.

Lower rates of inflation relative to those experienced in recent years and rising wages provided a boost to confidence, but the lingering impact of higher prices and elevated global risks dampened sentiment.

Danske Bank Chief Economist Conor Lambe said: “Consumer confidence in Northern Ireland increased in the second quarter of 2025 despite the ongoing high levels of economic uncertainty. Our survey showed that sentiment around current finances, future finances, job security and expected spending on expensive items all increased over the quarter.

“Although inflation picked up during quarter two, the generally softer pace of price rises relative to recent years was a key factor boosting confidence levels, closely followed by rising wages.

“Global risks remain elevated and our survey showed a small uplift in the proportion of respondents selecting this factor as the main negative influence on their confidence levels. However, the lingering impact of higher prices continued to be the factor having the largest dampening effect on consumer sentiment. Inflation is likely to remain above target over the rest of 2025 and into 2026, continuing to exert pressure on household finances.”

Peoples’ confidence about their current financial position increased by ten points over the quarter to 143, the highest reading since the second half of 2021.

Confidence relating to future finances also increased over the quarter but was slightly lower than in the second quarter of 2024.

Confidence regarding job security reached a series high reading of 117. The local labour market is in a reasonably robust position but there are some signs that the jobs market could be beginning to soften. For example, the unemployment rate increased quite sharply to 2.4% in the April – June 2025 period, up 0.8 percentage points from the previous quarter.

Sentiment around peoples’ expectations of spending on high value items increased by 11 points over the quarter and the survey also showed increased confidence relating to peoples’ savings expectations.

Conor Lambe added: “Despite the high levels of economic uncertainty, consumers in Northern Ireland have shown a considerable degree of resilience, with this latest rise in confidence further evidence of that.

“In quarter two, global risks had a negative impact on 17% of respondents, up slightly from 14% in the first quarter of the year. This likely reflects the increased uncertainty relating to global trade policy, including US tariffs, and geopolitical developments given the events of the last few months. High levels of global uncertainty are likely to continue to weigh on economic activity.

“Looking forward, some key factors which could impact people’s sentiment include global risks, changes in the rate of inflation, potential fiscal and monetary policy changes and the performance of the local labour market.”