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Southeastern Consumer Confidence Slow to Recover

RALEIGH, N.C. – Jan. 14, 2010 – In the aftermath of the sharpest economic downturn in a generation, consumer confidence has been slow to recover. However, Southeastern attitudes, which are typically more positive than the rest of the nation, show to be particularly hard hit over the past six months, standing lower in along the southeastern seaboard than seen in the country as a whole., according to the RBC Southeastern CASH Index (Consumer Attitudes and Spending by Household) commissioned by RBC Bank, which compiles data for the six U.S. southeastern states of North and South Carolina, Georgia, Florida, Alabama and Virginia.

The RBC CASH Index is a mathematical model of American consumer confidence based on the responses to ten questions regarding confidence in personal finances, the local economy and job security. The scores are calculated to a baseline of 100 based on the prevailing consumer confidence when the study was launched in 2002. The CASH Index scores should be read as relative to previous scores allowing the reader to tell if confidence has “gained” or “declined” over a period of time.

The RBC CASH Index in the Southeast for the period of July through December of 2009 stands at 31.1 -- lower than the 37.4 seen nationwide. Consumers in Florida and South Carolina are most concerned with personal finances; Georgians are least comfortable with making investments; consumers in Alabama and North Carolina are most worried that their communities will continue to weaken; and Virginians are most optimistic about job stability.

The national measure for the single month of January (interviews from January 7-10, 2010) is now 58.3, which increased by 19.3 points in a month-over-month comparison. This is the highest level of consumer confidence observed in over a year (since the 69.2 of Sept 2008). Consumer confidence shows improvement across the board with the most pronounced gains in consumer expectations and job security.

“While stock prices have rebounded from their March lows and signs are hopeful that the recession ended over the summer, the labor market is only slowly healing. Workers are still fearful for their jobs as net job formation has not yet turned positive,” said Joe Keating, RBC Bank Chief Investment Officer. “The recent lengthening of the average workweek and the rise in the number of temporary workers are hopeful signs that the jobs market will improve in early 2010, which will boost consumer confidence.”

Other RBC Southeastern CASH Index findings include:

  • The RBC Current Conditions Index in the Southeast has held steady at 25.8 in 2009 compared to 24.0 in late 2008. Particularly hard hit are communities in Florida (52%), Georgia (52%), North and South Carolina (54% and 59%) where over half of consumers say the economy in their local area is very weak. Residents of Florida and South Carolina continue to be the most concerned about their personal finances with 40% and 47% respectively saying their finances are weak.
  • Southeastern consumers continue to lose significant confidence in employment prospects. The RBC Jobs Index in the Southeast for the latter half of 2009 has fallen to 49.0. Georgia (65%), North (70%) and South Carolina (76%) residents have the least confidence in their job security. The lack of employment confidence follows real experiences with job losses, which are most severe in Georgia (72%), North (73%) and South Carolina (76%) where almost three-quarters of consumers know someone who has lost a job in the last 6 months.
  • The RBC Investment Index for the Southeast stands at 37.0 for the July-November 2009 period. Georgians are the least comfortable with their ability to make major purchases – 71% of residents of that state are less confident in their purchasing ability than 6 months ago. Most residents of South Carolina (69% less confident), North Carolina (63%), Georgia (62%) and Florida (61%) have lost confidence in their ability to make household purchases.
  • Southeastern consumers show some turnaround in expectations for their economic future causing RBC Expectations Index to improve over 30 points to stand at 30.7 for 2009. Consumers in Alabama (25%) and North Carolina (24%) are most worried that their communities will continue to weaken over the next 6 months. However, Virginians are relatively optimistic (42%) that no one else they know will lose their job in the next six months.

“It’s clear that it will take some time for consumer confidence to recover,” said Reggie Davis, RBC Bank president. “We know our clients need peace of mind, and as part of one of the largest and most stable financial institutions in the world, RBC Bank is proud to be able to truly focus on helping our clients create what’s important to them. We’re thrilled to be based and invested in the Southeast as it is a great place to live, work and do business.”

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 Bank serves clients through its retail and commercial banking network.

About RBC Bank
RBC Bank, headquartered in Raleigh, N.C., offers a wide range of financial services and advice to individuals, businesses and public institutions throughout the Southeast. RBC Bank’s network includes more than 430 full-service banking centers in six states (Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia), an extensive ATM network and telephone and online banking. RBC Bank is the 38th largest U.S. bank by consolidated assets, according to SNL Financial’s List of the Nation’s 50 Largest Banks, September 2, 2009. RBC Bank is a wholly-owned subsidiary of Royal Bank of Canada (RBC) (RY on the TSX and NYSE), Canada's largest and most stable bank as measured by assets and market capitalization. In August 2009, Global Finance Magazine ranked RBC as the safest bank in the Western Hemisphere. RBC is also one of the world’s financial, social and environmental corporate leaders for the past eight years as on the Dow Jones Sustainability World Index. Additional information about RBC Bank may be found at

For more information:
Dorsey Landis
RBC Bank/(919) 788-6272