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Danske Bank Quarterly Economic Overview for Q3 2013

Published in September 2013

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Contents

Summary of Quarter 2 2013 and economic outlook: 3

Global. United Kingdom. Northern Ireland.

1. Gross output estimates. 5

Economic growth forecast for Northern Ireland. GDP United Kingdom.

2. Labour market. 7

Employment. Vacancies. Labour market inactivity. Unemployment Redundancies.

3. Inflation. 11

Consumer price indices. Inflation forecast.

4. Housing market. 13

Northern Ireland. United Kingdom. Republic of Ireland.

5. Households and consumers. 15

Households’ resources. Consumer Confidence. New vehicle registrations.

6. Business environment. 17

NI Index of services and Index of Production Company liquidations. BoE “Agents’ Summary of Business Conditions”.

7. Exchange rates and interest rates. 20

Exchange rates: £/€ and £/$. Interest rates.

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TABLE 1 Annual 2011

Annual 2012

Latest Qly data

2013 Forecast

2014 Forecast

NORTHERN IRELAND

Annual 2011

Annual 2012

Latest Quarter

Forecast 2013

Forecast 2014

GVA growth

0.5

+0.1

0.3%

(Q2 - Oxford forecast)

+ 0.5

+ 1.7

Employment rate

810,600

(annual average)

799,500

(annual average)

811,000

67.5% (May-July

13)

800,000 (annual average)

81 810,000 (annual ave)

ILO rate

7.3%

7.4% 60,000

6.9% (May-July

13)

7.5%

(annual average)

7.5%

(annual average)

Claimant count

6.75%

6.7%

6.9%

(Aug 13)

7.3%

7.0%

UK Annual 2011

Annual 2012

Latest Quarter

Forecast 2013

Forecast 2014

GDP growth 1.5

0.5

+0.7%

(Q2 2013)

1.3

2.3

ILO Unemployment

8.0

7.9%

7.7% (May-July

2013)

7.8

7.6

Inflation [CPI Annual Average

(y/y change) 4.5%

3.0%

2.8

(July 13)

3.0

2.5

UK Interest Rate Annual Average 0.5%

0.5%

0.5%

(May 13)

0.5%

0.5%

ROI Annual 2011

Annual 2012

Latest Quarter

Forecast 2013

Forecast 2014

GDP +2.2%

+0.2%

-0.6 qoq (Q1 2013)

0.7

2.1

Unemployment

14.6%

14.6%

13.4% (Aug 13)

13.7%

13.2%

Inflation 1.1% 2% 0.2% (Aug 13)

0.8% 1.1%

RoI / ECB Interest Rate

Annual Average 1.25%

0.75% 0. 5% (Sept 12)

0.5%

0.5%

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Report by Angela McGowan and

Global:

The global economy showed further signs of improvement during Quarter 2 with developed economies in particular picking up speed. After two and a half years of very subdued growth in the Western world, a gradual recovery in developed economies is now emerging and is expected to gather pace in 2014 and 2015. Danske Bank’s latest global report “The Big Picture” forecasts global growth of 2.9 per cent in 2013 and 3.9 per cent in 2014.

(2013f GDP +2.9%)

Although the threat from the European debt crisis has receded, other new global risks have emerged. For example, rising bond yields in the US are a concern and any communication from the Federal Reserve regarding the tapering of asset purchases will be important. Should the rise in yields develop into a big risk for the US recovery, the Fed may need to halt its tapering plans. Furthermore, talk of Fed tapering has caused investors to pull back considerably on emerging markets (EM) during Quarter 2. These markets have seen a considerable sell-off in stock markets and currencies and therefore are expected to continue struggling during the latter part of 2013. Although a new Asian crisis is increasingly seen as a risk to financial markets and the global recovery, there are also reasons to expect a gradual improvement in EM growth. For example, rising demand from the developed world should raise EM exports next year as advanced economies grow. In addition, the latest PMI data from China suggest that the road is paved for higher growth going into 2014. United Kingdom:

(2013f GDP 1.3%)

The pace of recovery in the UK improved markedly during 2013 with a range of economic indicators surprising on the upside. In August the new governor of the Bank of England (BOE), Mark Carney, introduced ‘Forward Guidance’ for the UK. The BoE stated that it does not intend to raise the bank rate from its current level of 0.50 per cent at least until the unemployment rate has fallen to a threshold of 7 per cent, subject to three ‘knockouts’ based on the outlook for inflation, inflation expectations and financial stability. With the UK economy improving faster than expected and unemployment falling back to 7.7 per cent during May to July, doubts have been raised regarding the Bank of England’s ability to keep rates as low as he has promised. Revised GDP data for the UK was published in August and revealed that the UK economy expanded by 0.7 per cent in the second quarter of 2013. Danske Bank forecasts annual growth of 1.3 per cent for the UK economy this year and we expect growth of 2.3 per cent next year.

Northern Ireland:

Headline indicators suggest some improvement in local economic conditions yet it is too early to confirm whether the current recovery is sustainable. The number of jobless people in Northern Ireland fell to 60,000 during May to July - equating to 6.9 per cent of the working age population. The Danske Bank consumer confidence index also showed

(2013f GVA +0.5%)

Summary of Quarter 2 2013 and economic outlook.

4

improvement in Q2, bouncing back to reach the highest level for three years. The local housing market has also demonstrated signs of stability, with prices rising by 2 per cent between Q1 and Q2 2013 and housing transactions also reported to be up 10 per cent over the year. Danske Bank forecasts suggest that the local economy will grow by 0.5 per cent this year and 1.7 per cent in 2014. Republic of Ireland (RoI): (2013f GDP +0.7%) The Irish economy is expected to expand by 0.7 per cent in 2013 and 2.1 per cent in 2014. Ireland’s growth forecasts have been revised downwards due to protracted weakness in external demand – particularly from the UK and the Eurozone and historical growth transpiring to be weaker than initially thought. The National Accounts data shows a downward revision in Irish economic growth during 2012 (now estimated at only 0.2 per cent) - suggesting that the recovery was much more muted that previously estimated. The challenging external environment has taken its toll on Irish economic exports in 2013 and also the large pharmaceutical sector in RoI has seen exports slide due to some major drugs coming off patent. The unemployment rate has fallen from its peak of 15.1 per cent in early 2012 to 13.4 per cent in August this year.

Angela McGowan

Chief Economist

September 2013

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1. Gross output estimates

GDP United Kingdom

Provisional data from the Office for National Statistics (ONS) shows that the UK economy expanded by 0.7% in Quarter 2 2013, following growth of 0.3% in the previous quarter. The latest Oxford Economics / Danske Bank Sectoral Forecast report estimates that the annual growth rate for the UK economy in 2013 will be around 1.3 per cent.

Economic Activity Northern Ireland:

DETI – NI New Composite Index (NICEI)

The Northern Ireland Composite Economic Index (NICEI) is a new experimental quarterly measure of the performance of the Northern Ireland (NI) economy based on available official statistics. It is not possible to provide a comprehensive measure of quarterly Gross Domestic Product for NI due to the lack of suitable data sources. The latest NICEI was published on July 17th 2013 and showed the following:

• The NICEI decreased over Quarter 1 2013 by 0.8% to 98.0. The index fell 1.2% over the year.

• Activity in the NI Private sector was estimated to have decreased by 1.1% during Quarter 1 compared to Q4 2012. In Q1 private activity fell 1.7 per cent year on year.

• Activity in the NI Public sector remained at the same level recorded in Q4 2012

(97.0) (See Figure 1)

Figure 1: NI Composite Economic Index 2002- Q1 2013

Source: NISRA, NICEI published July 2013

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Northern Ireland’s private sector index is now close to levels previously recorded in Q3 2004. (See Figure 2) Figure 2:

Overview of Private sector sub-indices 2002-2013

Source: NISRA, July 2013

Economic Growth forecast for Northern Ireland

The Danske Bank/Oxford Economics Quarterly Sectoral Forecast report (August 2013) estimates that the local economy will grow by 0.5 per cent in 2013 (marginally revised up from 0.4 in the previous report). Growth is expected to pick up to 1.7 per cent in 2014. [see Figure 3).

Figure 3

Oxford Economics Q3 estimates and forecast of GVA growth (yoy) in Northern Ireland and UK. (2008 - 2014).

Source: Danske Bank/Oxford Economics Aug 2013

N.B.: Data for Northern Ireland output are available in the form of GVA (Gross value added), where GDP = GVA + Taxes – Subsides on products (the latter two items are available only at a national level).

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

Q1 2008

Q3 2008

Q1 2009

Q3 2009

Q1 2010

Q3 2010

Q1 2011

Q3 2011

Q1 2012

Q3 2012

Q1 2013

Q3 2013

Q1 2014

Q3 2014

%

GVA growth (%)

NI

UK

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2. Labour market

Employment Q2 2013

The latest Monthly Labour Market Report (published August 2013) by the Northern Ireland Statistics & Research Agency (NISRA) shows that the number of people in employment in Northern Ireland during the three-month period April to June 2013 was estimated to be 797,000, equating to 66.3% of people aged 16-64. This represented an increase of 4,000 over the quarter and 1,000 over the year.

The Northern Ireland employment rate (66.3%) remained lower than the UK average (71.5%) and was the equal lowest among the twelve UK regions.

Sectoral employment data for April to June 2012 period showed that the local services sector employed 870 fewer people over the quarter and ‘Other Industries’ employed 100 less people. The construction sector also shrank (-340 jobs) and Manufacturing also experienced a contraction of 200 jobs. Over the same period the public sector increased by 50 jobs while the private sector decreased by 1,230 jobs. [see Figure 4

Over the year to March 2013, the public sector increased by 0.1% (+250 jobs) compared to an increase of 0.3% (+1,590jobs) in the private sector.

].

Figure 4. Employee jobs in Northern Ireland: Annual and quarterly % changes by industry. (March 2013).

Source: DFP Monthly Labour Market Report, Aug 13

Labour Market Inactivity Q2 2013

The seasonally adjusted number of economically inactive persons (who are of working age 16-64 years) in Northern Ireland in the period April to June 2013 was estimated at 328,000. The local rate of inactivity (at 28.2 percent) is significantly higher than the UK average rate (22.3%) and is the highest of the twelve UK regions.

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Unemployment

• Claimant Count (July 2013) NISRA reported that the seasonally adjusted claimant count in NI decreased by 500 in the month to July 2013, it now stands at 62,400. The local claimant count rate now stands at 6.9% of the workforce and has decreased by 1.3 percent over the year (representing an decrease of 800 people). [see Table 2

In the UK, the April claimant count was 1.44 million, down 29,200 from June and down 145,400 over the year. The UK claimant count rate in July stood at 4.3%, down by 0.4 percentage points from a year earlier.

].

Table 2. Claimant count in Northern Ireland and UK

Level Monthly

change Annual change Rate %

July-13 (level) (level) July-13 July-12

Northern Ireland 64,300 -500 +2,100 6.9 8.2

UK 1.44 million -29,200 -145,400 4.3 4.7 Source: ONS

Figure 5 :Claimant count rate in Northern Ireland and UK (Jan 2008 - July 2013).

Source: DFP and ONS Labour Market Statistics, various issues

• ILO Quarterly Unemployment Rate (April-June 2013)

The International Labour Organisation (ILO) seasonally adjusted unemployment rate for Northern Ireland was 7.5% during Quarter 2 this year. This represents a fall of 0.7 percentage points over the quarter and 0.2 percentage points over the year. [see Table 3]. The ILO measure has since been reported to have fallen to 6.9% during the three months to July.

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The Northern Ireland ILO unemployment level was estimated to be 64,000 in during Quarter 2 2013, down 6,000 over the quarter and down 1,000 over the year.

The ILO unemployment rate for the UK was higher at 7.8% in the same period. The number of jobseekers at the national level during April to June 2013 was unchanged from the previous quarter but was down 0.2 percentage points over the year. There were 2.51 million unemployed people in the UK in Quarter 2 – down 49,000 from a year earlier. (See Table 3)

Table 3. Unemployment (ILO rate) in Northern Ireland and UK

Level Quarterly

change Annual change Rate %

Q2 2013 (level) (level) Q2 2013 Q2 2012

Northern Ireland 64,000 -6,000 -1,000 7.5% 7.7%

UK 2.51 m -4,000 -49,000 7.8% 8.0% See Figure 6

below for the long-term trend in quarterly unemployment rates for both Northern Ireland and the UK as a whole.

Figure 6. Historical unemployment in Northern Ireland and UK (Q2 ILO rates 1996-2013)

Source: DFP, NISRA and ONS, various issues

Figure 7

below shows that Northern Ireland and UK monthly ILO unemployment levels remain well below levels in the Eurozone and the Republic of Ireland.

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Figure 7. ILO Unemployment in Northern Ireland, UK compared to international comparators. (Jan 2008 - July 2013).

Source: Central Statistics Office RoI, ONS UK, DFPNI, Bureau of Labour Market Statistics US

and Eurostat (various issues).

Redundancies

During Quarter 2 2013 the Department of Enterprise, Trade and Investment (DETI)was notified of 437 confirmed redundancies, which was roughly 44% lower than the same quarter one year ago when redundancies sat at 660. (See Table 4)

The August labour market report shows that the Department was notified of 147 confirmed redundancies in the month of July alone - compared with 176 in the same month one year earlier.

There were 3,150 confirmed redundancies over the latest 12 month period, an increase of 49% compared to the same period in the previous year (2,121).

At the District Council level, the majority of confirmed redundancies over the year to 31ST July occurred in Belfast (976) , Lisburn (334) and Ballymena (325).

Table 4 below shows a breakdown of redundancies by industrial sector during Q2 2013 compared with the same period one year earlier.

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Source: DETI

3: Inflation

Consumer price indices

UK inflation sat at 2.8 per cent in July 2013 down from 2.9 per cent in June and up from 2.6 per cent in July 2012. [see Figure 8

Figure 8.

]. Over quarter 2 2013 headline inflation averaged 2.7 per cent – virtually unchanged from the previous quarter. Overall the CPI rate is expected to average 3 per cent during 2013.

Source: ONS (August 2013 and various issues)

Figure 9 below presents an international comparison of year on year rates of inflation since 2008.

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Source: ONS UK, Eurostat, CSO Ireland, US Bureau of Labor Statistics (various issues)

Inflation forecast

According to the Bank of England’s Inflation Report published in August 2013, CPI inflation is expected to stay around 3 per cent in the near term. In the MPC’s view, it is more likely than not, that CPI inflation 18 to 24 months ahead will be 0.5 percentage points or more above the 2% target. [see Figure 10

].

Figure 10. Bank of England inflation projections, August 2013 (up to 2016).

N.B.: BoE projections are made under the assumption of that the Bank Rate moves in line with market rates and the asset purchase programme remains steady at £200 billion.

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4. Housing market

Northern Ireland

The University of Ulster Index examined house prices in Northern Ireland during

Quarter 2 2013 on the basis of a sample of 1,409 open market transactions. The

results for the latest quarter show that the pick-up in transactions during Quarter 1

was maintained during Quarter 2. The average house price in Northern Ireland was

also stable - at £130,000.

Figure 11. Northern Ireland House Price Indices (Q1 2003 - Q2 2013).

Source: University of Ulster / Halifax House Price Index

DFP: Residential Property Price Index

The latest DFP Residential Property Price Index published in August 2013 shows

that local house prices increased by 2 per cent between Q1 and Quarter 2 2013.

This index shows that over the 12 months to June 2013 residential property prices

fell by 3 per cent. Around 3,400 verified residential properties sold in Quarter 2

2013 – this is a 10 per cent increase on the number sold in Quarter 2 last year. This

index, which uses all verified property sales as recorded by HM Revenue & Customs

and shows that property prices are now less than half of the peak value (recorded Q3

2007).

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Oxford Economics: House Price Forecast

The Oxford Economics outlook for house price growth in Northern Ireland is shown in Table 5

below.

Table 5. Oxford Economics House prices forecast Aug 2013 - Growth %.

2011 12 13 14 15 16 2017

Northern Ireland -11.1 -9.6 -2.0 0.1 0.4 1.6 2.8

UK -1.0 1.6 2.5 2.0 1.8 3.3 4.2 Source: Oxford Economics, Aug13

United Kingdom Housing

According to the Halifax house price index, house prices at the national level rose by

2.1% in the latest three months to August 2013. Prices in the three months to August

were 5.4% higher than in the same three months a year earlier.

Republic of Ireland Housing

The CSO’s Residential Property Price Index for June 2013, points to a rise of 1.2% in Irish

house prices. In Dublin residential property prices grew by 1.7% in June and were 4.2%

higher than a year ago. Dublin house prices grew 1.4% in the month and were 3.6% higher

compared to a year earlier. Dublin apartment prices were 9.7% higher when compared

with the same month of 2012. Overall, the national index is 50% lower than the peak in

2007

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5. Households and consumers

Households’ resources

According to figures from the ONS’s Quarterly National Accounts (published on June

27th) the UK household saving ratio was 4.2% in Quarter 1 2013 compared with 5.9% in

the previous quarter. Over the past five years the savings ratio has averaged 5.6 per cent.

(See Figure 12)

Figure 12

Source: ONS

Consumer Confidence

Northern Ireland’s latest Consumer Confidence index rose by 13 points to reach 117

during Quarter 2 2013, a 9 point increase on the same period last year. The index was

driven up by a move away from negative opinions towards more neutral or even slightly

positive responses.

Figure 13. Danske Bank Consumer Confidence Index for Northern Ireland (Sep 2008 - July 2013).

Source: Danske Bank (2013)

Sep-

08

Dec

-08

Mar

-09

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

Jun-

11

Sep-

11

Dec

-11

Mar

-12

Jun-

12

Sep-

12

Dec

-12

Mar

-13

Jun-

13 90

95 100 105 110 115 120 125

NI Consumer Confidence Index: Sept 2008 to June 2013

16

UK Consumer Confidence index:

According to the GfK survey, UK Consumer Confidence Index increased by three

points in August following a five point rise in July and now stands at -13. This is its

highest level since October 2009. The index has risen by 14 points in the last four

months – the first time in three decades (1982) it has risen so substantially in four

months.

New Vehicle Registrations (+3.1%)

The most recent data on new vehicle registrations in Northern Ireland were

published by the Department of Regional Development in June 2013. The new

figures for Quarter 1 2013 show that the number of new cars registered for the first

time during the quarter decreased marginally by 0.26% (from 16,401 to 16,357)

compared to the corresponding quarter in the previous year.

The ten-year average for new car registrations in Northern Ireland during Quarter 1 sits

at around 21,052. The latest data shows that new car sales were still roughly 22

percent below the long-term trend during Quarter 1.

In Northern Ireland the ten year average for “all new vehicles” registered (which includes

vans, haulage vehicles buses and tractors etc) during the Quarter 1 period is 27,156. The

latest data shows that local registrations of ‘All new vehicles’ during Q1 2013 was

20,710 - which is down roughly 24 per cent on the long-term trend.

Figure 14: New car registrations and all newly purchased vehicle registrations in Northern Ireland. (Quarter 1 period 2001 - 2013).

Source: DRDNI, June 2013

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6. Business Environment

NI Index of Services Q1 2013 (IOS) (-1.4% qoq)

Provisional data for the Q1 Index of Services (which draws on a sample of 1,900

companies) were published by DFP on 17th July 2013. The IOS showed that local

output levels rose 1.3 per cent over the year but decreased by 1.4% in real terms over

the quarter. The Department (DETI) reports that the index remained some 12 per cent

below the peak (recorded in Q3 2006). The most notable change during Quarter 1 was a

fall of 3.1% (as based on order of importance of contribution to the overall index) in the

Business services and finance sector.

Figure 15

Source: DFP, July 2013

Provisional results from DETI’s Index of Production for the first quarter of 2013 showed

that output in NI fell over the quarter (-0.3%), while output in the UK as a whole increased

by 0.2%. The NI index remains some 14.9% below the peak recorded in Q2 2008

(120.1), whilst the UK index has decreased by 13.1% over the same time period. This

quarter’s decrease in the production sector in NI is the fifth fall in output over the last

eight quarters. (See Figure 16)

NI Index of Production (IOP) Q1 (-0.3% qoq)

18

Figure 16:

Index of Production in NI and UK (2009=100)

Source: DFP, July 2013

Data from the Insolvency Service of the Department of Enterprise Trade and

Investment (DETI) show a total of 105 company liquidations in Northern Ireland in

Quarter 2 2013.

Company liquidations Q2 2013

Compulsory liquidations rose by 120 percent in Quarter 1 relative to the previous

quarter and voluntary liquidations rose by 156 per cent. Total liquidations were up

190 per cent over the quarter but down 11 per cent over the year (from 118 to 105)

[see Figure 17)

.

Figure 17: Company liquidations Northern Ireland. (Quarterly data from 2002 to Q2 2013).

Source: NISRA, Insolvency Service

19

The Bank of England’s Agents’ Summary of Business Conditions was published in August 2013 and is a summary of monthly reports compiled by the Bank of England's Agents, following discussions with around 700 businesses. The latest findings in the summary report are as follows:

Bank of England: Agents’ Summary of Business Conditions, August 2013

• Annual growth in the value of consumer spending had remained moderate. There

were signs of increasing consumer confidence, though disposable incomes had remained tight.

• Activity in the housing market had picked up further in recent months.

• Investment intentions had continued to point to only modest growth in capital

spending.

• Growth in manufacturing output had been unchanged for the domestic market, though it had increased a little for exports.

• Sentiment in business services had improved further, alongside continued growth

in turnover.

• Construction output had strengthened, as house building had increased over recent months.

• Corporate credit availability had continued to improve gradually.

• Employment intentions pointed to a slight increase in staffing over the coming six

months.

• Capacity utilisation had remained slightly below normal both in manufacturing and services, though the margin of spare capacity in services had narrowed a little.

• The annual rate of growth in labour costs per employee had been little changed.

• Annual growth in materials costs had remained subdued and moderate inflation in

imported finished goods prices had continued.

• Inflation in manufacturers’ output prices had edged lower and had remained very subdued for business services prices.

• The rate of consumer price inflation had been unchanged.

20

7. Exchange rates and interest rates

Outlook for Exchange rates: £/€ and £/$

A combination of the Bank of England being less dovish than expected and very strong UK

numbers means that there is the potential for a slow and steady move lower in EUR/GBP

over the next 6 months. The ‘forward guidance policy’ has now officially been presented.

The BoE has stated that it does not intend to raise the Bank Rate from its current level of

0.50% at least until the unemployment rate has fallen to a threshold of 7%, subject to

three ‘knockouts’ based on the outlook for inflation, inflation expectations and financial

stability. The knockouts were a disappointment and to a certain extent they undermine the

power of ‘forward guidance’. At the time of writing (Sept 2013) the strong economic

numbers in the UK currently make a breach of one or more of the ‘knockouts’ more likely. If

that happens an even more pronounced GBP appreciation could occur.

Figure 14.

Danske Bank Markets

Interest rates.

The Bank of England Rate is maintained at 0.5% since March 2009 and it is expected to remain at this level until 2015 at the earliest. The 3-month LIBOR interbank rate (at which banks borrow funds from each other) averaged 0.506% throughout Quarter-2 2013, (relative to 0.99 one year ago). In Q2 2013, 1- year LIBOR averaged 0.9%, comparing with 1.828 for the same period one year earlier.

21

• Bank of England – “Agents’ summary of business conditions – August 2013”. • Bank of England – Data from the database “Interest & exchange rates”. • Bank of England – “Inflation Report – August 2013”. • Bureau of Labor Statistics (U.S.A.) – “CPI Detailed Report - Data for August 2013”. • Bureau of Labor Statistics (U.S.A.) – The employment situation – August 2013. • CSO (Central Statistics Office Ireland) – “Seasonally Adjusted Standardised

Unemployment Rates” as available on the website.

• CSO (Central Statistics Office Ireland) – Table “Consumer price index by month”. • DFP -NI – “Monthly Labour Market Report - September 2013” and previous releases. • DFP NI –“Residential House Price Index”, August 2013 • DETI-NI – “Northern Ireland Index of Production Q1 2013 - July 2013”. • DETI-NI – “Northern Ireland Index of Services (experimental) – Quarter 1 2013, July 13 • DETI-NI - “Northern Ireland Composite Index for Q1 2013”, July 2013 • DRD-NI (Department for Regional Development) – “Northern Ireland Road and Rail

Transport Statistics” (June 2013) and various releases from 2001 onwards.

• Eurostat – Table “HICP – All index”. • GFK/Nop – “Consumer Confidence Barometer” - latest releases. • Halifax – “Historical house price data” as available on the website. • Halifax – “House Price Index Q2 2013”. • Nationwide – “House Price Index”: new releases and database. • Northern Bank – “Consumer Confidence July 2013” • Oanda (Forex Trading and Exchange Rates Services) – “Historical exchange rates”

database as available on the website.

• ONS – “Consumer Price Indices Statistical Bulletin – August 2013”. • ONS – “Gross domestic product revised estimate – Quarter 2 2013, August 2013” • ONS – Data from the “Claimant Count” statistics, as available on the ONS website. • ONS – Data from the “Labour Force Survey” as available on the ONS website. • ONS – Data from “Time Series Data - UK Economic Accounts” database. • ONS – Data from “Time Series Data - Consumer Price Indices” database. • The Insolvency Service – Insolvency Statistics, in particular the table “Insolvencies in

Northern Ireland”.

• University of Ulster – “Northern Ireland Quarterly House Price Index - for Q2 2013” and previous releases.

References.

23

2012.11

Danske Bank is a trading name of Northern Bank Limited and is authorised and regulated by the Financial Services Authority. Registered in Northern Ireland R568 Registered Office: Donegall Square West, Belfast, BT1 6JS

Northern Bank Limited is a member of the Danske Bank Group.

www.danskebank.co.uk

This is the opinion of Danske Bank, on occasion based upon research conducted at the time and obtained from sources believed to be reliable. This may be subject to change without notice and is not a personal recommendation.

UK

Prepared on 18th April 2012

Quarterly Sectoral Forecasts Quarter 2 2012

Executive Summary

Economy at a standstill… Just as signs of a recovery were beginning to emerge, the preliminary data reported that the UK has fallen back into recession, with a fall in GDP of 0.2 per cent recorded. However, concerns exist over the reliability of the quarterly UK data as the contraction was underpinned by poor performance within in notoriously volatile construction activity. Thus it is likely that the data will be revised upwards. The lacklustre growth means that the economy is almost at the same point as it was 18 months ago, and well below the peak experienced in 2008. Little change in Northern Ireland’s fragile outlook… The recent data for Northern Ireland gives little reason to suggest any significant change in the broad outlook. As always quarterly estimates of growth at a regional level are very volatile and subject to the performances of individual large firms but the current projection for Q2 growth in NI is a fairly anaemic. Northern Ireland continues to suffer from a relatively limited export base which is unable to fully offset the difficulties in the public and domestic sectors.

The picture is not entirely gloomy: unemployment has not risen as fast as feared and consumer confidence, though still relatively weak, has begun to improve. In addition Northern Ireland has thus far avoided the scale of job loss in public services that many local authorities have endured in the UK and with the feel-good factor over the Titanic anniversary and associated tourist events there are positives to be found.

Source: Oxford Economics Note: Year on year growth is calculated using the growth

from Q1( t-1) to Q1(t).

2013.09

Danske Bank Quarterly Economic Overview for Q3 2013

Danske Bank is a trading name of Northern Bank Limited. Registered in Northern Ireland R568. Registered Office: Donegall Square West, Belfast BT1 6JS. Northern Bank Limited is a member of the Danske Bank Group.

www.danskebank.co.uk

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