The rate of growth in Irish consumer spending ticked up slightly in September, as signalled by Visa's Irish Consumer Spending Index (CSI). Expenditure across all payment types (cash, cheques and electronic payments) increased +5.1% year-on-year, slightly faster than the previous month's +4.8% rise but signalling a rate of expansion that was again much weaker than seen earlier in 2016.
Consumer spending has risen on an annual basis throughout the 25-month series so far, but the latest increase was weaker than the average seen over this sequence. There remained a wide divergence between the rate of expansion in spending via eCommerce and face-to-face categories in September, with the former continuing to lead growth.
Spending in eCommerce categories was up +13.4% year-on-year, slightly slower than that seen in August, but nonetheless posting a double-digit expansion for the fifth time in the past six months. Meanwhile, face-to-face spending was up only +0.8% year-on-year, the weakest expansion in the 25 months of the series to date. One of the factors impacting face-to-face spending during the month was the Dublin Bus strike, with retailers reporting sales declines between 25-60% on the days of the strikes1.
Looking at the broad spending categories, there was also no change in the lead performer in September, with Recreation & Culture again posting the strongest expansion (+12.5% year-on-year). Sharp rises in spending were also recorded in the Transport & Communication and Hotels, Restaurants & Bars sectors, while Food & Beverages saw an acceleration in the rate of expansion.
In contrast, Clothing & Footwear spending decreased for the second month running in September, down -2.0% year-on-year. This was the same pace of contraction as seen in the previous month. As was the case in August, the sector was the only one to see an outright decline in spending.
Philip Konopik, Country Manager, Ireland, Visa said:
“Ahead of Budget 2017, it is a positive milestone to have recorded the 25th consecutive month of growth in Irish consumer spending. While we continued to see strong performances in the Recreation & Culture and Transport & Communication sectors, it was particularly positive to see strong growth in expenditure at Hotels, Restaurants & Bars with a 6.2% rise in year-on-year spending in September, compared to a +0.6% increase last month. With no transport strikes planned over the coming month, hopefully we will see a boost for retailers in October.”
Andrew Harker, Senior Economist at IHS Markit said:
“While it was pleasing to see the rate of expansion in consumer spending stabilise in September, it is looking like we are now in a lower growth environment compared with the first half of the year. This is backed up by other data such as consumer confidence and retail sales, as well as PMI survey data on business activity. That said, with unemployment continuing its downwards trajectory and a number of sectors remaining comfortably in growth territory, we should continue to see further rises in consumer spending going into Q4.”
Notes to Editor
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 @VisaEuropeNews