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CarsalesThe NFDA is encouraged by signs that car sales are finally picking up in Northern Ireland, after a long period where growth has lagged behind the rest of the UK.

New car registrations have increased in July of this year, and seem increasingly likely to match 2014’s sales figures. According to SMMT figures, new car registrations have increased 1.6 per cent compared to July of last year.

It’s positive to see that Northern Irish consumers are feeling confident enough to make these big purchases. We hope that this is a sign of positive change for the future, rather than a temporary blip.

Rising car sales have been aided by the cheap financing available across the UK. Falling prices for both fuel and food have also increased the disposable income of Northern Irish consumers. If low oil prices continue, which seems likely under current conditions, consumers should find more cash in their pockets.

Generally, the economic outlook has been much more negative in Northern Ireland than the UK as a whole, with fluctuating business confidence and low consumer confidence. If Northern Ireland can tackle its productivity problem, it could help its sluggish economic growth, which is the lowest in the UK at 1.8%.

A small rise in unemployment in June did nothing to improve the situation, although unemployment has fallen overall since June 2014. The public sector especially has been shedding workers, which is problematic as it is the traditional backbone of the Northern Irish economy as the main employer. However, there are rising numbers of people in work in advanced manufacturing, the pharmaceutical industry, food processing and tourism, which could be a step away from this traditional reliance.

However, Ulster Bank’s Chief Economist, speaking to the Belfast Telegraph, did sound a note of caution, forecasting that any growth in new car sales was ‘likely to be modest’, due to consumer worries over public spending cuts. The controversy surrounding the Welfare Bill in Stormont which has an impact on the Northern Irish budget is also a drag on consumer peace of mind.

Posted by Sue Robinson on 14/08/2015