Spending on housing and bills set to rise in Northern Ireland, says survey
Housing and utility bills are set to make up more than a quarter of total household spending by 2020, with the rise having an even greater impact on Northern Ireland.
That's according to PwC's latest UK Economic Outlook (UKEO) survey.
And PwC's chief economist, Dr Esmond Birnie, said this represented an annual real increase of around 3.5% between now and 2020, but that it could represent more for Northern Ireland homes.
"Northern Ireland average wages are around 85% of the UK average, so local households will spend proportionately more on housing and utilities," said Dr Birnie.
"A recent report from the Centre for Economics and Business Research (CEBR) found that Northern Ireland has the highest percentage of UK workers on the minimum wage and that households here also spend more on essentials such as petrol, food and energy.
"So, while low interest rates, falling oil prices and an improvement in real wages have contributed towards some growth in household disposable incomes, the overall impact of an annual 3.5% increase in housing and utility costs will be unwelcome."
PwC also projects that the share of total spending in leisure-related areas such as recreation, culture, hotels and restaurants will increase between now and 2020.
And in contrast, the share of spending on other areas such as food and clothing are projected to decline as price competition from online and high street discounters remains fierce.
Most areas of spending are predicted to rise.
That also includes recreation, home furnishings and communications.
And looking at overall economic growth, the UKEO survey shows the UK is due expand by around 2.3% in 2015. But Northern Ireland is expected to deliver the lowest growth of the 12 UK regions at 1.6%, just behind the north east of England and Wales.
Dr Birnie said looking ahead, the analysis suggests real income growth will pick up further this year and into 2016, but may then moderate as cuts come into effect.
"With limited scope for further reductions in household savings ratios from already low levels, this is likely to cause either a reduction in consumer spending growth in the medium term, or a potentially unsustainable build-up in household debt," he said.