Visa’s Irish Consumer Spending Index continues to signal growth in household expenditure during August, with a year-on-year growth of +4.6%. However, the figure is the lowest rate of expansion since May 2015, and lies below the average since data was 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. Growth in face-to-face expenditure approached stagnation, however. A +0.8% rise year-on-year is the slowest recorded so far.
The Recreation & Culture sector was the strongest performer again in August. Spending in this category, which covers a range of areas including cinemas, travel agents, book stores and theatre tickets, was up +12.2% year-on-year, a faster rise than in July.
Transport & Communication and Household Goods also performed well, and the Society of the Irish Motor Industry reported new car sales rising +14.3% year-on-year in August.
Hotels, Restaurants & Bars suffered a marked slowdown in August as compared to July, with spending rising only +0.5% year-on-year as compared to +8.4% in the month before.
Only one sector registered a drop in spending - Clothing & Footwear - with expenditure down -2.1% year-on-year in August.
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.”
Concerning the figures, Andrew Harker, Senior Economist at IHS Markit commented: “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.”
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