Dublin, 11 July 2017: Visa's Irish Consumer Spending Index, which measures expenditure across all payment types (cash, cheques and electronic payments), recorded another month of modest growth in consumer spending year-on-year, with a 1.6% increase in June. While this was the quickest rate of expansion in the past three months, the quarter overall was the weakest of the series to date since the index began almost three years ago. Spending increased by +1.0% during the quarter on an annual basis, with growth now having slowed in four successive quarters.
eCommerce was the principal driver of the overall expansion in consumer spending again, with June seeing a +7.2% year-on-year increase. This was little-changed from that recorded in May. On the other hand, Face-to-Face expenditure decreased for the ninth month running (-1.2% year-on-year). This was despite the pace of decline easing from the previous month.
All but one of the eight monitored sectors registered spending growth in June, the exception being Transport & Communication where expenditure decreased (-3.0%) for the third month running. Moreover, the reduction was the most marked in the series to-date.
The strongest expansions were in the Household Goods (+8.2% year-on-year) and Hotels & Restaurants (+6.8% year-on-year) categories, with the former posting the fastest increase since May 2016.
Growth of spending also accelerated in the Food & Drink (+3.4%), Clothing & Footwear (+1.7%) and Recreation & Culture (1.4%) sectors. Clothing & Footwear put in its joint-best performance since July last year (+1.7% year-on-year), recording a third consecutive month of expansion, which is extremely positive as the sector had been challenged in previous quarters.
Philip Konopik, Country Manager, Ireland, Visa said:
“After spiking in February 2016, the growth in Irish consumer spending has gradually levelled out, with the last quarter representing the weakest degree of expansion since we began the index. There was an uptick in June and it will be interesting to see if this leads to further expansion over the summer or whether consumer confidence becomes more cautious given the potential for future shocks. There are still lots of positives to be drawn from the data, with the majority of sectors seeing increases in expenditure and it is fantastic to see a positive trend emerge for Clothing & Footwear with year-on-year rises in each of the last three months.”
Andrew Harker, Senior Economist at IHS Markit said:
“We’ve seen a welcome pick-up in spending growth during June, providing some cause for optimism that households are becoming more willing to spend again following a soft-patch. The weakness in April and May, however, means that the second quarter as a whole saw the slowest expansion in spending since the series began. The fact that official consumer spending data for Q1 is not available until later this week shows the value of the CSI as a barometer of household expenditure given that we now have a full picture for the first half of 2017.”