Kristian Rouz — A new survey suggests the Northern Irish public sees prospects of the UK economy in the most pessimistic light out of all the nation's major regions. The British economy as a whole has steadily defied Brexit-related fears, but Northern Ireland has underperformed due to Brexit putting into question its close economic ties with the neighbouring Republic of Ireland.
According to a Which? Consumer Insight Report 2019 for Northern Ireland, compiled by the Consumers' Association, Ulster households are most concerned about energy and fuel prices, as well as the prospects of Brexit and its impact on the regional economy.
The report found 42 per cent of Northern Irish residents to believe the British economy is in a poor state, while 60 per cent expect the situation to get worse in the coming 12 months.
"The research highlights a worrying sense of pessimism among consumers in Northern Ireland, with Brexit, fuel costs and public spending weighing on people's minds more than anywhere else in the UK," Caroline Normand of Which? said.
Subdued consumer confidence is spreading across Northern Ireland due to the region's weaker economic performance over the past few quarters. According to the Ulster Bank, new orders, exports, employment, and overall economic output posted a contraction in 1Q19 over the previous quarter.
Ulster Bank said Northern Ireland's manufacturing posted a steep decline in March, while the number of people at work has decreased since the start of the year.
"April saw an improvement in business conditions across most of the UK regions," Richard Ramsey, chief economist at Ulster Bank, said. "However, Northern Ireland was a notable exception to this trend. Rather than improving, the pace of contraction across a range of indicators accelerated."
Many Irish businesses feared a 'no-deal' Brexit to take place on 29 March — which didn't happen, but, if it did, it would have threatened a hard border between Northern Ireland and Ireland.
This would mean customs tariffs and other restrictions on trade within Ireland — and while Ulster's economy is traditionally intertwined with Ireland's market, many companies enacted contingency plans to offset the expected drop in operational profitability — hence the contraction in employment and weaker activity overall.
However, Northern Ireland's manufacturing was the only sector to expand in March, in line with the ongoing resurgence in industrial output across the UK. But the retail sector posted its worst performance in seven years.
"As a result, Northern Ireland found itself at the bottom of the UK regional rankings for these measures," Ramsey said.
Overall, only 49 per cent of UK households expect the macroeconomic situation to deteriorate in the coming year.
Some 66 per cent of Northern Irish respondents said they are worried about inflation, particularly, rising food prices. Growth in energy prices was a concern for 68 per cent of respondents.
However, some 71 per cent of respondents in Northern Ireland said they are satisfied with their lives overall, while, quite surprisingly, for the entire UK, the share of satisfied citizens was smaller, at 65 per cent.
51 per cent of Northern Ireland's residents assessed their personal finances as 'good', while for the entire UK the percentage was smaller, at 49 per cent.
"With uncertainty around Brexit and Stormont politics looming large, politicians, regulators and businesses in Northern Ireland must take heed of these findings and work to ensure consumers are not getting a raw deal when it comes to essential services," Which?'s Normand said.
Northern Ireland's government says the report's results must be taken into account by MPs in London, where the region is represented by the Democratic Unionist Party (DUP).
Although MPs are still debating a Brexit deal, which could help avoid a 'hard border' across Ireland, officials say the exposure of Northern Ireland's economy to Brexit risks highlights the need for a tighter integration between the region and the rest of the UK.