SOUTHEASTERN CONSUMER CONFIDENCE CONTINUES TO FALL, ACCORDING TO RBC SOUTHEASTERN CASH INDEX
SOUTHEASTERN OUTLOOK STILL BRIGHTER THAN U.S. CONFIDENCE OVERALL
RALEIGH, N.C. - Feb. 4, 2008 - Continued concerns about the housing market, gas prices and making major purchases caused Southeastern consumer confidence to continue to decline in the second half of 2007. Following a year of remarkable stability in 2006, consumer confidence in the Southeast fell during the first six months of 2007, and the slide escalated in the second half of the year, according to the RBC Southeastern CASH Index (Consumer Attitudes and Spending by Household) commissioned by RBC Centura Bank. The Southeastern drop in confidence was not as precipitous as the drop seen nationally, as the Southeast traditionally has a more positive view than the rest of the country.
The overall CASH Index for the Southeast dropped 13 points in the second half of 2007 to 79.9 compared to 92.9 for the first half of 2007. That is closely in line with the 75.8 observed nationally, down from a steady 91.2 for the first two quarters of 2007. The CASH Index is benchmarked against a baseline score of 100, assigned in January 2002 when the Index was introduced.
Decreasing confidence in the Southeast was driven in a large part by unease with major purchases, such as homes and cars. Currently about half (49 percent) of Southeastern residents report they are less comfortable making major purchases than they were six months ago. This is the fourth straight six-month period of declining confidence in current conditions.
One of the biggest drops was in confidence about the future of the economy. Expectations for the future stands at 23.8, a decrease of more than 21 points compared to the first six months of 2007. Despite the significant drop, the magnitude of the decline was less than what was seen nationally.
The sharp drop in expectations and the overall weakening in consumer confidence may be a troubling indicator for the future of consumer sentiment in the Southeast.
The RBC Southeastern CASH Index findings include:
"With the turmoil in the housing market during the second half of the year, it is understandable that there was a drop in consumer confidence - not only nationwide - but in the Southeast," said Scott Custer, RBC Centura chairman and CEO. "However, the area remains a great place to do business, and Southeastern consumer confidence still outpaces the rest of the country."
The RBC CASH Index is a composite measure of national consumer attitudes toward the state of local economies, personal financial situations, savings and investment, and job security. The recent six-month analysis includes a focused look at the Southeast where RBC Centura serves clients through its retail and commercial banking network.
The RBC CASH Index is broken down to include four sub-indices: the RBC Current Index (measuring attitudes toward the present strength of local economies and personal financial situations); the RBC Expectations Index (measuring confidence in future economic prospects); the RBC Investment Index (measuring consumers' attitudes toward spending and saving for the future); and the RBC Jobs Index (measuring attitudes about job security and experiences with job loss).
RBC Southeastern CASH Index
Baseline of January 2002 = 100
RBC CASH Index
The RBC CASH Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal financial situations, savings, and confidence to make large investments. The CASH Index is benchmarked against a baseline score of 100, assigned in January 2002 when the Index was introduced. The CASH Index is conducted by Ipsos Public Affairs. Results in this report include combined interviews of monthly surveys from January 2007 to July 2007. National results include 6,002 total interviews and have a margin of error of +/- 1.3 for all adults. The Southeast regional results by RBC Centura include 940 total interviews with a margin of error of +/- 3.3 for all adults. The Southeast region covers interviews in Florida, Georgia, North Carolina, South Carolina and Virginia.
About RBC Centura
RBC Centura, headquartered in Raleigh, N.C., offers a wide range of financial services and advice, including a complete line of banking, and mortgage services to individuals, businesses and public institutions throughout the Southeast. RBC Centura's multi-faceted customer access network includes more than 340 full-service banking centers, an extensive ATM network, and telephone and Internet banking. In addition, RBC Centura offers builder finance products through its RBC Builder Finance division. According to SNL Financial, RBC Centura is the 45th largest U.S. bank based on assets as of August 2007. RBC Centura Banks Inc. is a wholly-owned subsidiary of Royal Bank of Canada (RBC) (NYSE, TSX: RY), Canada's largest bank as measured by assets and one of the world's financial, social and environmental corporate leaders for the past eight years as on the Dow Jones Sustainability World Index.