- Rate of expansion in household spending gains further momentum, accelerating for the third month in a row
- Overall growth driven by faster rise in eCommerce spending, +8.9% year-on-year, but Face-to-Face expenditure declines for the tenth month in a row
- Sharp increases in spending across Hotels, Restaurants & Bars and Recreation & Culture
Dublin, 8 August 2017: Growth of spending by households in Ireland continued to gather pace at the start of the third quarter of the year. Visa's Irish Consumer Spending Index, which measures expenditure across all payment types (cash, cheques and electronic payments), signalled a +2.5% year-on-year increase in expenditure in July, up from +1.8% in June. This was the third month running in which the rate of growth has accelerated, with the latest rise in spending the most marked since March this year.
Growth of eCommerce spending rose for the third successive month in July, with expenditure up sharply (+8.9%) from the same month a year ago. This trend underlines the growth in popularity of online shopping among Irish shoppers, with European Commission research released last month1 showing that the strongest growth in the number of online shoppers in the EU last year was in Ireland, where there was a 7.8% increase. 59.2% of the Irish population made an online purchase in 2016 and Ireland also had the highest percentage of businesses (with at least 10 persons employed) selling online.
In contrast, Face-to-Face expenditure continued to fall, the tenth month running in which a decline has been recorded. The pace of reduction, however, at -0.5% year-on-year in July, was the slowest so far this year.
On a sectoral basis, Hotels, Restaurants & Bars posted the fastest increase in spending, seeing growth of +9.1% year-on-year. The Recreation & Culture category also registered a sharp rise in expenditure (+6.7%), while Household Goods remained a strong performer (+7.2%.)
The recent recovery in Clothing & Footwear spending also continued in July. Expenditure in the sector was up for the fourth month running and to the greatest extent since May 2016 (+3.2% year-on-year). The current period of growth follows a sequence of seven declines in eight months. A solid increase in spending was also recorded in Food & Drink (+3.2%.)
Transport & Communication posted a marginal rise in spending (+0.3%) for the second month in a row. Meanwhile, the only sector to see a reduction in expenditure was Health & Education, where spending was down -2.8% on the same month a year ago.
Philip Konopik, Country Manager, Ireland, Visa said:
“Our latest data shows that the growth in Irish consumer spending remains modest, but encouragingly the rate of expansion has now accelerated over three consecutive months, with eCommerce as the key driver. The further improved unemployment rate, with increasing job prospects, is likely to help support further rises in consumer spending in the future.”
Andrew Harker, Senior Economist at IHS Markit said:
“Visa’s Irish Consumer Spending Index provides further evidence of building growth momentum in household spending following a soft-patch earlier in 2017. There were some encouraging signs from categories that have been under pressure through much of the past year. Clothing & Footwear posted the fastest rise in expenditure since May 2016, while Face-to-Face spending moved closer to stabilisation, providing some hope that the high street can start to contribute to growth again in the near future.”
1 Consumers at home in the Single Market 2017 edition http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=117250
About Visa Inc.
Visa Inc. (NYSE:V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead with prepaid or pay later with credit products. For more information, visit our website (www.visaeurope.com), the Visa Vision blog (www.vision.visaeurope.com), and @VisainEurope