Asda’s latest Income Tracker has revealed that while there is more spending power for NI consumers, Northern Ireland remains the UK’s worst performing region when it comes to consumer recovery.

The average family here is left with £129 per week in their pocket to spend on goods, services and luxuries – £22 more than the same time last year.

However, despite leading the way in terms of spending power growth in Q3 (21.1%) the rate of recovery in Northern Ireland is slow and it remains the worst performing region in the UK.

The figures were revealed in the quarterly Asda Income Tracker report which was launched at a breakfast briefing in Belfast on Tuesday 22^nd October.

Independently compiled by Cebr (Centre for Economics and Business Research), Asda’s Income Tracker report provides an important barometer of day-to-day spending power, indicating how costs such as taxes, utility bills, transport costs and interest rates impact on the average family.

As the weakest performing region, Northern Ireland lags well behind the UK as a whole, where the average family now has £250 per week at its disposal, £29 more than 12 months ago (13% increase).

‘The region was particularly exposed to the cost-of-living crisis due to the structure of household income and spending’

On a more positive note, Northern Ireland has recorded five consecutive quarters of growth in discretionary household income, including a very strong 21.1% increase in growth in the last year alone.

While the spending power of the average UK household has now overtaken the pre-cost-of-living crisis peak of £246 (Q1 2021), this trend does not apply to Northern Ireland where discretionary income remains almost 11% below the 2021 peak. This remains the largest gap of any UK region.

According to Sam Miley, Cebr Managing Economist and Income Tracker author, the recovery has only just begun.

“The recent improvement in spending power for Northern Ireland is welcomed, but it should be noted that the average household remains considerably worse off relative to three years ago.

“The region was particularly exposed to the cost-of-living crisis due to the structure of household income and spending. Though the worst has now passed, with earnings growth solidly outpacing inflation, it may be several years before living standards in Northern Ireland are completely recovered.”

Speaking at the stakeholder briefing event which included economists, business leaders, and policy experts Joe McDonald, Head of Corporate Affairs, Asda NI said: “It is really encouraging to see sustained growth in local household incomes over five consecutive quarters and we very much hope this trend continues.

“However, unlike other UK regions, spending power in Northern Ireland households hasn’t recovered to pre-cost-of-living crisis levels, so we still have ground to make up.”

The post Some improvement in NI spending power in last 12 months first appeared on Neighbourhood Retailer.

At an increase of 5.6%, Northern Ireland was the UK’s third strongest growing region in Q3, overtaken by Yorkshire & Humber (6.7%), and London (7.3%).

Despite the good news, in terms of weekly spending power, Northern Ireland remains the weakest of all regions and lags considerably behind the UK, where the average family now has £221 per week at its disposal and is £11 better off compared to this time last year.

Independently compiled by Cebr (Centre for Economics & Business Research), the Asda Income Tracker has become an established barometer of spending power, indicating how much families have left in their pockets after all taxes and essential bills are paid.

The most recent data indicates that while spending power is now in recovery, for those living in NI, the return to growth has been delayed, driven by weaker earnings growth and exposure to inflationary pressure.

And despite showing improvement from the same period last year, there is a significant lag from Q3 2021 – pre the cost-of-living crisis – when spending power in NI was £134 per week.

REGIONAL REPORT

The regional report was launched at a stakeholder briefing in Belfast where attendees discussed the research and how it is reflected across local communities, businesses, policy-makers and charities.

According to Cebr Managing Economist and Income Tracker author, Sam Miley, the signs are largely positive.

“Only 12 months ago, the Income Tracker was showing that household spending power in Northern Ireland was dropping at a record level, as the cost-of-living crisis ate into household budgets,” said Sam.

“Spending power has now returned to growth, amidst slowing inflation and improved earnings growth. In monetary terms, the average Northern Irish household now has just over £5 more per week in discretionary income relative to a year ago.

“The annual improvement in Q3 does mask some demographic differences, however. Households at the lower end of the income spectrum are still witnessing falling spending power, while younger households are also faring worse.”

‘There is still a long way to go before the losses caused by the cost-of-living crisis can be fully recovered’

With the labour market being an influencing factor on the Income Tracker, Sam added: “Northern Ireland sees a disproportionate number of public sector jobs compared to the UK average. This has held back spending power in the region, given that public sector pay growth has been outstripped by the private sector over the last two years.

“Northern Ireland also tends to witness a lower employment rate and a higher inactivity rate compared to the UK average. These factors contribute to the regional disparity in spending power.

“In the near term, Northern Ireland’s labour market has held up better than most amidst difficult economic conditions. This supported above average income growth and the return to improving spending power in Q3.”

HOUSEHOLD SPENDING

Other factors affecting NI family spending power include the high cost of essential spending, and the concentration in categories recording above average inflation (eg food, alcohol and tobacco).

Household spending in Northern Ireland is also concentrated in several areas that are likely to see deflation in the coming months, including energy and motor fuels. Annual price falls in these categories could help to support spending power looking ahead.

In terms of looking forward Sam added: “The return to spending power growth in Q3 should be taken as a positive. With inflation expected to continue easing and earnings growth set to remain elevated compared to historic averages, spending power should improve further for the rest of the year and into 2024.

“Nevertheless, there is still a long way to go before the losses caused by the cost-of-living crisis can be fully recovered. There are also risk factors to consider, notably the prospect of a long period of higher interest rates.”

Also speaking at the event, Niall Keyes, Senior Director, Asda NI added:

“Income Tracker continues to provide a very honest insight into consumer spending and is widely recognised for its relevance and reliability.

“The latest data indicates that there are green shoots on the horizon which can only be a positive. But as a retailer, we know the cost-of-living crisis continues to hit hard and this means ongoing challenges for many local families who are concerned about their finances and the need to make them stretch as far as possible.

“We’ve introduced new measure to support our customers and will continue to do all we can to help those who shop in our stores.”

The post Asda Income Tracker reveals spending power of NI family is on the up first appeared on Neighbourhood Retailer.