Barbenheimer economy: a beach for some, a timebomb for others

It has been something of a blockbuster summer for cinemas, with the release of Barbenheimer (i.e. Barbie and Oppenheimer) coinciding with the wettest July on record to drive people to their local movie theatres. Something similar has been happening with Bingo halls; another area that had previously been so badly affected by the pandemic. But it hasn’t been a blockbuster summer for the economy overall, with conditions in the private sector, like the weather, taking a turn for the worse. So what’s going on?

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At sixes and sevens?… (UK and NI new car sales fall to six and seven-year lows respectively)

Last year was a record year for both the UK and Northern Ireland labour markets. Employment has never been higher and unemployment (for Northern Ireland) has never been lower. Given these labour market conditions one would assume that consumer confidence must be strong too?  Not so. Previously having a job, or not having one, was a key determinant of whether a household or individual was in poverty. Over the last decade, however, a sustained period of below inflation wage growth and cuts to working-age welfare benefits has squeezed disposable incomes for those in work too.

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Petrol Head Index


It probably hasn’t been a great year for Jeremy Clarkson. But can the same be said for petrol heads as a whole? Whilst consumers in general have been benefiting from falling food, clothing and energy prices, what has been happening to fuel, car, and auto part costs? With the hotly anticipated new series of Top Gear set to get underway, I thought it would be worth taking a peak under the bonnet.

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PMI: Growth of new work at nine-month high

Graphic showing that the Ulster Bank NI PMI has seen growth in new business at a 9-month high in June

Today sees the release of June data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – indicated that output growth was maintained as new orders rose at an accelerated rate. Increased new business led to a build-up of outstanding work, but the rate of job creation eased. Meanwhile, cost inflation moderated and companies raised their output prices for the first time in ten months.

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Chart of the Month

Chart of the Month

There are significantly fewer ‘R-plates’ on our roads today than there were before the recession. The number of private car driving tests conducted in Northern Ireland peaked at 68,444 in 2008. This followed an increase of 28% between 2005 and 2008. Following five years of decline, with a cumulative fall of 37% (or 25,511 tests) driving tests hit a low of 42,933. An R-plate recovery now appears to have taken hold with 2014 posting the first rise in 6 years. Despite the modest 2% rise (+989 tests), last year’s total remains 36% (24,522) below the 2008 peak. The number of individuals aged 17-24 years of age also peaked in 2008 and has been falling ever since. This age-group accounts for the vast majority of driving tests. Even allowing for demographic changes it is clear that economic factors largely explain the decline. The 18-24 years of age cohort have borne the brunt of the downturn in terms of pay cuts and unemployment. For many, learning to drive is not a necessity.  The preponderance of R-plates can therefore be viewed as a visible sign of consumer confidence amongst the younger generation.