The primary factor for the decline in consumer spending in Ireland last year which showed a -0.7%, is the loss of a trading day due to the Leap Day in February 2016, according to the latest data from Visa's Irish Consumer Spending Index published today (14 March).
The index also highlighted that Transport & Communications and Household Goods saw the strongest spending trends during the month of February, with spending across the Transport & Communication category rising by +5.0% year-on year and Household Goods recording annual growth of +2.4%.
Philip Konopik, Country Manager, Ireland, Visa said: “February marks the fifth month in a row where the increase in consumer spending has registered at less than +5.0%, underlining the trend that growth is slowing amid a cautious outlook by Irish consumers."
Konopik added, "The other shift that is still clearly evident is the continued rise in popularity of eCommerce and it is positive to note the recent figures from the European Commission's Digital Economy and Society Index which show that Irish SMEs rank first out of 28 countries in Europe for small firms selling online.”
Allied to this, the data projected that even without the impact of the Leap Day in 2016, spending on the high street would still have fallen year-on-year for the month of February, whereas online expenditure would have continued to increase strongly.
Andrew Harker, Senior Economist at IHS Markit said: “While overall spending decreased, this was due to February this year having one trading day less than in 2016 which was a Leap Year. Without this impact, growth would have continued, although at only around 3% which would be among the weakest since the series began in September 2014.
Online shopping continues to be much stronger than face-to-face spending, with eCommerce tracking +7.6% year-on-year this month, and face-to-face declining at -5.0% year-on-year.
"Underlying trends in online and Face-to-Face spending were little-changed, with eCommerce continuing to power ahead while the high street remained under pressure. We’d expect to see a return to growth in spending next month when the impact of an additional trading day won’t be a factor, but it looks as though the recent soft-patch for consumer spending is continuing.” Harker added.
© 2017 - Checkout Magazine by Donna Ahern