ASDA’S latest Income Tracker report has produced some good news for observers of the Northern Ireland economy.
The report measures discre-tionary household incomes, ie, what the average family has left over to spend each week when all the bills are paid. Northern Ireland extended its positive run of Income Tracker results, showing an annual increase in family spending power of 8.4 per cent in the second quarter of 2019.
At a rate of 3.1 per cent, unem-ployment remains well below the UK average, and wages have grown by 3.5 per cent year-on-year. Meanwhile, the share of employees working in the public sector has fallen below 25 per cent for the first time since comparable records began.
This suggests an increasingly dynamic private sector- led economy in Northern Ireland, something which always gets a mention as a strategic objective.
Consumer Price Index inflation also held steady during June at 2 per cent, another boost to consumers. Indeed the price of footwear and clothing fell for the 10th month in a row and there have been some very welcome falls in fuel prices recently.
In summary, whisper it quietly, Northern Ireland had the highest rate of family income growth in the UK during the second quarter of this year, meaning local families had on average £8.80 per week extra discretionary spend compared to the same period last year.
This paints a positive picture of household finances solidly moving in the right direction, but unfortunately this provides no guarantee that we will see a significant boost in spending, with the benefits flowing to all of us in the supply chain.
This year has been a difficult year to date in the retail sector and the recent spell of good weather was badly needed to kick-start some consumer spending. As temperatures soared in parts of England to record levels, Asda predicted an increase in barbecue sales of 250 per cent, selling 4.5 million barbecue lines including sausages and burgers, and a 500 per cent spike in sales of picnic lines such as sliced cheese and coleslaw. A few weeks of fine weather during August would be a major boost for all of us as we’ve seen how the sales dial can move significantly when the sun comes out.
Beyond that, we are facing into an autumn of perhaps unparalleled uncertainty as the new Prime Minister takes us towards a October 31 Deal or No Deal deadline with the EU. We will be working closely with our local suppliers to maintain business as usual wherever possible. Asda offers access to 19 million UK consumers every week and whatever happens politically, this grocery market will still need to be serviced by our local suppliers.
However, the prospect of a No- Deal leading to export tariffs on some of our agri-food suppliers who also have an export arm is a significant worry. I have found in all deliberations on Brexit that representatives from retail, agri-food and the farming sectors have largely been on the same side of the argument, pressing Government for a business-friendly outcome which secures supply chains and local jobs.
That work will intensify in the months ahead and it is fair to say that the current stability in household incomes is a welcome backdrop for the crucial months ahead.