Dublin, 13 June 2017: Visa's Irish Consumer Spending Index, which measures expenditure across all payment types (cash, cheques and electronic payments), signalled continued modest growth of consumer spending year-on-year in May. Expenditure was up +0.6% on the year compared with +9.2% in May 2016, with the rate of expansion little-changed from that seen in April (+0.7%).
The rises in spending during the second quarter of the year so far have been among the weakest since the series began in September 2014, suggesting a slowdown in growth of Irish household expenditure. Recent expansions have been particularly weak in comparison to the strong increases seen during much of 2016, with growth not rising above +4.5% since September last year.
The main source of growth was via eCommerce channels during May, with spending up +7.0% year-on-year. This represented an acceleration in the pace of expansion from the previous month (+3.6% in April), but was the second-slowest rise for two years. Face-to-face spending continued to fall, meanwhile, with expenditure down -2.5% year-on-year this month. Spending on the high street has now declined on an annual basis in eight successive months.
The best-performing broad sector in May was Household Goods, where spending was up +6.2% year-on-year, a faster expansion than in April (at +5.3%). Food & Drink posted a solid rise in expenditure with growth of +3.2%, recording growth for the third month running.
Modest increases in spending were recorded in the Clothing & Footwear, Recreation & Culture and Hotels, Restaurants & Bars categories, which all showed growth of +0.8% in May. Growth in the Clothing & Footwear was notable as it the first time that the category saw a year-on-year rise in consumer spending for two consecutive months since July 2016.
The only sector to see a drop in expenditure over the year was Transport & Communication, the second successive month in which a reduction has been seen. Spending was down -1.9% year-on-year, a marginally slower fall than in April which came in at -2.2% decrease.
Philip Konopik, Country Manager, Ireland, Visa said:
“Irish consumer spending continued to rise on an annual basis in May, but very slowly and in stark contrast with the same period last year where we saw a +9.2% year-on-year increase. On a positive note, Clothing and Footwear saw a year-on-year increase of +0.8%, marking the second consecutive month of growth for that sector. An encouraging trend given the category was tracking a decline in spending for seven of the previous eight months.”
Andrew Harker, Senior Economist at IHS Markit said:
“Irish households continued to display an element of caution in their spending in May, with Visa’s CSI signalling one of the weakest performances in the past three years. The high street is being hit hardest as people search out bargains online in the face of stronger inflationary pressures, with Face-to-Face spending down for the eighth month in a row during May. This contrasts with a pick-up in growth across eCommerce, which continues to drive the overall expansion.”