(up in Q2 y/y but down y/y in June)
New car sales are traditionally viewed as a key barometer of consumer confidence. Despite the labour market being the strongest it has ever been, consumer confidence – viewed through the lens of new car sales – remains uninspiring. Last month proved to be the weakest June for dealers in seven years with 5,170 new vehicles rolling out of showrooms. That was six per cent lower than last year. However, the latest figures follow the best May in 11 years and a mediocre April. As a result, the second quarter still posted a respectable 2.7% y/y rise (+369 cars) and the strongest Q2 in three years.
Taking a look over the longer-term reveals a familiar trend – new car sales in Northern Ireland have been broadly flat or falling for the last five years. At the halfway point of the year some 30,837 new cars were registered in H1 (Jan-Jun) 2019. That was broadly on a par (-0.5%) with H1 2018 (30,992). However, it still marks the weakest first-half start to a year since 2013 and around three-quarters of the sales volumes (40-41k cars) that occurred in the first-half of 2006 and 2007.
Back in 2006/07, record highs in employment and lows in unemployment were accompanied by robust consumer confidence. Today, however, this is not the case. Despite strong wage growth and record labour market performance of the positive variety, consumer confidence appears to be conspicuous by its absence. Weakness in retail and consumer sensitive sectors (outside of tourism) is expected to be a key theme going forward. Brexit uncertainty and deteriorating economic conditions at home and abroad don’t help matters either.
