Visa data supports notion of a consumer recovery

New figures from electronic payments giant Visa show spending by Irish consumers rose by 6.4%, on a year-on-year basis, in July.

The data — based largely on spending via Visa credit and debit card usage — offers further evidence Irish consumers haven’t as yet been spooked by the UK’s Brexit vote.

A similar survey, for Britain,showed a 1.6% consumer spending rise in July; the largest increase seen there in three months.

The rise in the Irish spend followed on from a 6% annualised increase in June. While online spend continued to dominate spending patterns — up 9.9% in the month — it rose at its slowest pace since March.

Spending on the high street, however, was up by 4.8%, having risen only 1.9% by comparison in June.

“While there is some economic uncertainty at the moment, we have not seen an impact on Irish consumer expenditure as yet with household spending continuing to rise.

"The overall rate of growth in July was slightly stronger than the 23-month series average and all sectors saw an increase in spending during the month,” said Philip Konopik, Visa’s country manager for Ireland.

Adding to the notion of an improvement in consumer outlook, a new ‘recovery index’ from business analyst Vision-net yesterday showed 36% of Irish consumers plan at least one major purchase before the end of the year, with a holiday being the most commonly planned item, followed by a second-hand car.

While 46% of respondents cite a lack of available finances as being the biggest obstacle to making a purchase, most said they are reluctant to take on debt — suggesting much of the aforementioned Visa spend was done via prepaid or debit cards — with only 15% using a loan as the sole means of finance.

“Today’s research suggests consumer confidence is slowly returning to the Irish economy. Following a period of financial restraint after the financial crash, Irish people now feel secure enough to begin making significant purchases again,” said Vision-net managing director Christine Cullen.

But she warned restrained earning potential and macro-economic concerns are keeping consumers cautious about long-term financial prospects.