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Home Makeovers By Irish Consumers Helping To Drive Spending Growth In May

09/06/2015

DUBLIN, 9 June 2015: Visa Europe's Irish Consumer Spending Index data signalled ongoing strength in household consumption growth in May, extending the current run of expansion to nine months. According to the latest data, expenditure increased by +4.0% compared to the same period a year earlier. Although a little down on April's +4.3%, growth at this level remains marked and points to the ongoing recovery of consumer spending in Ireland in line with an increasingly positive economic backdrop.

Visa Europe’s Irish Consumer Spending Index is a monthly economic barometer which takes card spending data and adjusts it for a variety of factors to provide a robust indicator of total consumer expenditure across all payment methods.

Growth was again broad-based and led by spending at retailers. May's data showed that spending in the Food & Beverages sector (which includes supermarkets) rose especially sharply, registering growth of +9.7% compared to April's +9.1%. Another notable performer was Household Goods (+8.4%), with consumers increasing their expenditure on a range of items such as furniture and electrical goods. The Clothing & Footwear sector recorded a year-on-year rate of expansion of +6.8%, up from +6.5% in the previous month and the best recorded since February.

May's data again signalled the broad-based nature of the upswing in spending and highlighted the growing confidence amongst households. Hotels, Restaurants & Bars recorded a series record pace of growth of +8.6%, while there was a +4.3% increase in spending within the Recreation & Culture category. Spending by channel revealed a healthy increase in face-to-face based expenditure, with growth of +3.1% the second-best recorded of the year so far. E-commerce spending rose by +6.2%, compared to April's +7.8%.

Conor Langford, Country Manager, Ireland, Visa Europe said:

“Irish consumer spending is rising as households start to see the benefits of the economic recovery and are more confident in their outlook. One of trends that Visa’s data shows is that homeowners – both new and existing – are increasing their spending on items like furniture and electrical goods.”

“Despite the introduction of new regulations on residential mortgage lending, there is still a rise in loan approvals and there are reports of increased credit demand from furniture and home retail operators in the first quarter of the year. As a result, we are seeing more home makeovers as new owners kit out their property and existing homeowners are taking a more positive outlook by replacing old household items.”

Paul Smith, Senior Economist at Markit said:

“Consumer spending growth continued to hum along nicely during May, maintaining the recent trend. Growth was broad-based and, indicative of the increasing confidence amongst households, spending on the high street rose at a marked and accelerated pace.”

“The data for 2015 so far suggest that consumer spending and wider GDP growth will be sustained at marked rates over the first half of the year to thereby confirm the ongoing recovery of the Irish economy.”