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Strong Rise In Irish Consumer Spending Amid Budget Announcement

11/11/2015

DUBLIN, 11 November 2015:The latest Visa Europe Irish Consumer Spending Index signalled sharp and accelerated growth of consumer expenditure in October, the month which saw the announcement of Budget 2016. Spending was up +6.8% year-on-year, following a rise of +5.5% in September. Moreover, the expansion was the strongest seen in the 14-month series history, a period during which spending has risen continuously.

The latest overall expansion in spending was broad-based by sector, with household goods again leading the way with a +14.2% spike in expenditure as consumers spent money on home improvements. A second successive double-digit expansion in expenditure (+12.3%) at clothing & footwear stores was recorded as clothing retailers continued to experience strong demand.

Spending at hotels, restaurants & bars also rebounded in the year to October, up +11.5% from 12 months previously, after a relatively stable September. Pubs benefited in particular due to a number of sporting events during the month. The midterm break also provided a boost for the travel and recreational sectors. Families took advantage of the time off school to enjoy a holiday, with airlines like Ryanair recording a boost in their traffic figures during the month. The latest Bond film Spectre’s release on the October bank holiday Monday coincided with a +8.5% increase in expenditure in the Recreation & Culture category, providing a boost for cinemas across the country.

Retailers on Irish high streets experienced the fastest rate of acceleration in the series so far, with a +5.2% rise in spending during October. Growth in eCommerce spending also remained substantial during the month, with another double-digit annual increase of +10.6%, following a rise of +11.8% in September. Looking ahead, the continued lack of inflationary pressure should help to maintain confidence among consumers and boost their spending power, with businesses hopeful that this will translate into higher expenditure in the run-up to Christmas, particularly with Black Friday (27th November) and Cyber Monday (30th November) taking place in November.

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

“Our latest data has revealed a further strong expansion in consumer spending during the month of October. Consumer confidence improved to a three-month high and hopefully this will translate into higher expenditure in the run-up to Christmas. Spending was up across the board, with household goods recording the largest growth of any category during October with a +14.2% rise in expenditure as consumers spent money on home improvements.”

Andrew Harker, Senior Economist at Markit said:

“The fourth quarter of the year started with a bang according to the latest Visa Europe Irish Consumer Spending Index. A real positive was growth in face-to-face spending as consumers flocked to the high street, resulting in the fastest increase in the series so far. Areas of strength ranged from spending on nights out to the more practical DIY items, highlighting broad-based improvements in the economy. The trends in the data provide real optimism that the run-up to Christmas will see further strength in expenditure, with the first expansionary budget in many years potentially helping to loosen the purse strings further.”