Spring in Step for NI Households as Spending Power Reaches the £100 per Week Milestone
However, Northern Ireland remains worst performing region – and lags far behind the UK average of £198 per week
Pace of growth also slows – 7.2% compared to 14.8% in same quarter last year
The spending power of the average Northern Ireland family has finally reached the £100 per week milestone, according to Asda’s latest Income Tracker – a rise of £7 per week from the same period last year.
However the gap between Northern Ireland and other regions of the UK remains significant, with the closest being the North East where households have £129 of disposable weekly income, once taxes and bills have been paid. Northern Ireland also lags far behind the UK average of £198 per week, and the top performing region – London - where average household discretionary income is £266 per week.
The Income Tracker report also reveals that the pace of growth in Northern Ireland has slowed significantly to 7.2% compared to the same period last year where the region enjoyed an increase of 14.8%. However this is representative of the situation across the UK and is largely due to the general rise in essential item inflation (0.1%) - the first time the measure has stood above zero since the end of 2014. Continued weakness in NI’s labour market is also a constraint to spending power growth.
Across the UK as a whole, there are positive signs for families. In contrast to the rising prices across clothing and footwear (1.4%), as well as the increased expense of dining out in restaurants and cafés (1.9%), notable drops were seen in the cost of vehicle fuel (-9.2%) and electricity and gas (-3.7%), helping to keep inflation generally low.
Meanwhile, for those shoppers looking to stock cupboards for get-togethers over warmer evenings, a decrease in the cost of food and drink (-2.7%) provided a welcome surprise at the tills.
UK wide employment levels and wage growth also remained stable last month. The employment rate stood steady at 74.1%, while regular earnings growth remained at 2.2%.
Some regions, such as the East of England, Wales and the West Midlands were boosted by falling rates of unemployment, and also saw incomes rise at the fastest rate.
Further interesting regional insights from Asda’s March Income Tracker, showed that:
- The East of England experienced the biggest increase in disposable income, with this rising by £19 a week
- London saw spending power rise slightly - up £14 on the same period last year - however the percentage increase of 6% sees its rate of growth remain below the UK average of 6.3%
- The North East saw the slowest growth in gross income in the last quarter, associated with a rise in unemployment driven by sluggish conditions in the local manufacturing sector
- Wales was the second best performing region with spending power increasing by £14 (8.3%) compared to last quarter, marking a close in the gap with the rest of the UK after having seen weak growth in previous months
Andy Clarke, Asda President and CEO said: “The sustained rise in discretionary income gives family finances a welcome boost ahead of the summer months. While inflation has slightly increased in recent months, low overall interest rates continue to be good news for consumers.
“The outlook remains cautiously positive, despite a slow-down in wage growth across the country as a whole, which really can be seen on a regional level where we are already noticing an increase in household income. Wage levels in Wales in particular are extremely encouraging, while discretionary income in Northern Ireland has reached a milestone of £100 – a promising figure. This represents a number of positive indicators which should give UK families confidence for the coming months.”
Sam Alderson, Economist, Cebr, said: “While increases in inflation in recent months have weighed on growth rates, households across the country continued to benefit from robust annual increases in spending power in March.
“While Assembly elections and the upcoming referendum on EU membership provide an uncertain background for consumers, the low levels of essential item inflation and growing discretionary incomes should continue to provide support to both consumer spending and overall economic growth.”