Press Releases | Visa
Irish consumer spending grows +4.6% year-on-year in August, slowest expansion since May 2015
Visa Inc. (NYSE: V) While Visa’s Irish Consumer Spending Index (CSI) continued to signal growth in household expenditure during August, the rate of expansion eased from that seen in July. Expenditure across all payment types (cash, cheques and electronic payments) rose +4.6% year-on-year, still solid but weaker than the +6.3% year-on-year increase recorded in July. In fact, the rate of growth was the slowest since May 2015 and below the average since data were first calculated in September 2014.
Spending via eCommerce channels continued to be the main driver of growth during August. Expenditure rose +13.5% year-on-year, up from +9.9% in the previous month. On the other hand, growth in Face-to-Face expenditure slowed to near-stagnation. The rise of +0.8% year-on-year was the slowest in the two-year series history.
As has been the case for some time now, the Recreation & Culture sector was the star performer on a sectoral basis in August. This category covers a range of areas including cinemas, travel agents, book stores and theatre tickets. Spending in the category was up +12.2% year-on-year, a faster rise than in July.
Stronger growth of expenditure was also seen in the Transport & Communication and Household Goods sectors. The Society of the Irish Motor Industry reported that new car sales in August rose 14.3 per cent year-on-year, with 7,313 official 162 car registrations recorded during the month1.
The only sector to register a drop in spending was Clothing & Footwear where expenditure was down -2.1% year-on-year following a +2.6% increase in July. This was the first annual reduction since October 2014. Meanwhile, Hotels, Restaurants & Bars recorded a marked slowdown in the pace of expansion as spending rose only +0.5% year-on-year, compared to the +8.4% year-on-year increase recorded in July.
Philip Konopik, Country Manager, Ireland, Visa said:
“While we saw continued growth in Irish consumer spending in August, it came at the weakest pace in 15 months. Despite the ongoing economic uncertainty, however, it should be noted that there is no evidence of a sustained slowdown of Irish consumer expenditure as yet. The reason for the weak rate of growth in August is the near-stagnation in Face-to-Face spending, which saw a marginal +0.8% year-on-year increase during the month. There were a number of positives, with the Recreation & Culture sector coming out as the star performer with a double-digit expansion of spending in August as the rate of growth picked up.”
Andrew Harker, Senior Economist at IHS Markit said:
“Irish households continued to increase their spending on an annual basis during August, and although the rate of growth eased from July it remained solid as eCommerce categories performed strongly again. The main area of weakness appeared to be on the high street, particularly in Clothing & Footwear where a decline in spending was recorded. This perhaps reflects some pay-back from a solid performance in July when some people may have brought forward their summer spending. With wage growth slowing and consumer confidence taking a Brexit-vote hit, the more modest growth trajectory could continue in coming months, but there is little prospect of an outright drop in spending occurring.”
Notes to Editor