Consumer spending grows 0.8% in Q4 across the EU.
However the pace of growth was the weakest recorded in
2010
- Q4 was the fifth successive quarter of spending
growth
- Eastern Europe records strong growth
while growth in Greece and Ireland continued to
decline
22nd February 2011 – The Visa
Europe: EU Consumer Spending Barometer indicates that consumer
spending grew 0.8% year-on-year in the fourth quarter (Q4) of 2010.
However the pace of growth slowed from 1.2% in Q3, reflecting the
muted economic recovery across the EU.
This represents the fifth straight quarter
of growth amongst EU member states, though the barometer indicates
that the rate of growth has slowed since the peak recorded in Q1
2010 when it was 2.5%.
The EU Consumer Spending Barometer is based
on actual spend rather than sentiment or opinion, and this data is
then adjusted to allow for Visa card issuance, consumer payment
preferences and inflation. The Barometer is a reliable economic
indicator as it provides the most precise and comprehensive insight
into the health of consumer spending in the EU. Unlike other
indices or surveys that are based on sentiment or opinion in
particular sectors, this Barometer provides an accurate reflection
of real consumer spending across the EU based on consumer’s
increasing preference for card payments, with €1 in every €8 spent
in Europe on a Visa card.
Across the EU spending levels varied
significantly from country to country according to the Barometer.
It indicates that Eastern European countries, including Poland,
Latvia and Estonia, recorded strong consumer spending growth, while
Ireland and Greece recorded strong falls in overall spending.
Amongst the larger EU countries, the
Barometer indicates that spend in Germany and Italy fell mildly but
rates of contraction moderated over the quarter. In the UK and
France consumer spending continued to increase, though the rate of
growth slowed against Q3. The reduction in growth was in part a
result of the adverse weather conditions experienced in Q4, a
situation that affected many Northern European nations. The
Barometer shows that the situation recorded in Spain was similar
with a rise in expenditure albeit at a slower rate than in Q3.
In Q4, unadjusted spending on Visa cards
totalled €253bn up 17.2% on the same period in 2009. Average
transaction values fell for the second quarter in a row to €50.1
down from €50.8 in Q3.
Philip Symes, Chief Financial Officer at Visa Europe
said:
“Consumers within the EU have faced rising
inflation, government cutbacks, weak economic growth and in many
cases difficult weather conditions in the last quarter of 2010. It
is therefore encouraging to see that the EU Consumer Spending
Barometer indicates that consumer expenditure continues to
grow.
“In the face of all these difficulties it is
perhaps unsurprising that the rate of spending growth has slowed.
While the consumer makes up an important part of the EU economy,
this trend of slower growth is however likely to be reflected in
GDP figures for the first part of 2011.”
Andrew Self,
Economist at Markit, said:
“EU consumers rounded off 2010 by posting the
weakest growth in spending of the year. That said, growth has now
been recorded for five straight quarters, and to see any rise in
spending despite considerable uncertainties surrounding inflation,
government austerity plans and the ongoing Eurozone debt crisis is
positive.
“Mirroring the trend recorded in the wider
economic recovery, the upturn in consumer spend that the EU
Consumer Spending Report shows has been uneven. Strong growth in
Eastern Europe, as well as solid expansions in the UK and France,
have contrasted with ongoing contractions in Ireland and Greece.
There are, however, signs that consumers in the Eurozone
‘peripheral’ nations are turning a corner. Greece and Ireland both
recorded slowdowns in rates of contraction, while Italian consumers
cut back only modestly over the year. Spanish spending meanwhile
posted a further increase.”
About the Visa Europe’s EU Consumer Spending
Barometer
Over one in every eight euros spent in the
EU is on a Visa card, with more than 70% of that spending on debit
cards. This means the Report provides a uniquely comprehensive and
timely insight into the health of consumer spending in the European
Union.
Visa Europe’s EU Consumer Spending Barometer
is based on spending on all cards issued by Visa – debit, credit
and prepaid. Markit has developed the Barometer by creating a model
which adjusts the raw Visa transaction data for a number of
factors.
First, the data are deflated by changes in
the number of Visa cards issued to account for the expansion of
Visa’s business. Secondly, an adjustment is made to offset changing
consumer preference for card usage. This is based on an assessment
of the trends in cash withdrawals and point-of-sale (POS)
transactions on Visa cards. Finally, to account for inflation, the
data are deflated by changes in the consumer price index to provide
an indicator of real changes in household expenditure.
The Visa data have enjoyed a strong positive
relationship with equivalent official numbers in recent years. The
Visa data cover a much wider range of sectors than just retail as
cards are increasingly used for payments such as utility and tax
bills.
You can now read the full Visa Europe: EU Consumer Spending Barometer.
-Ends-
About Visa Europe
In Europe, there are more than 419 million
Visa debit, credit and commercial cards. In the 12 months ending
September 2010 those cards were used to make purchases and cash
withdrawals to the value of €1.5 trillion. 12.5% of consumer
spending at point of sale in Europe is with a Visa card, and more
than 70% of that is on Visa debit cards.
Visa Europe is owned and operated by more
than 4,000 European member banks and was incorporated in July 2004.
In October 2007, Visa Europe became independent of the new global
Visa Inc., with an exclusive, irrevocable and perpetual licence in
Europe. As a dedicated European payment system it is able to
respond quickly to the specific market needs of European banks and
their customers - cardholders and retailers - and to meet the
European Commission’s objective to create a true internal market
for payments.
Visa enjoys unsurpassed acceptance around
the world. In addition, Visa/PLUS is one of the world’s largest
global ATM networks, offering cash access in local currency in over
200 countries.
For more information, visit http://www.visaeurope.com/