Retail spend jumps 2.2%
Irish consumer spending rose 2.2% in August, on a year-on-year basis, aided by low inflation and rising wages.
While the annual rate of growth was unchanged from July and weaker than the 4.8% average seen since 2014, further spending increases are expected up to the end of the year.
The latest figures, compiled by IHS Markit on behalf of payments giant Visa, show that face-to-face/over-the-counter sales increased 2.1%, while online/ e-commerce transactions were up 2.4%.
Online sales growth was at its weakest last month since January, while expenditure in the shops has now posted 12 straight months of growth.
“Consumer spending growth continues to tick along nicely as the summer draws to a close, with both the high street and online sales increasing solidly,” said Andrew Harker, associate director at IHS Markit.
“With wages increasing at the strongest pace since the financial crisis and unemployment remaining relatively low, economic conditions appear to be supportive of further increases in expenditure during the rest of 2018,” he said.
“While recent rises in Irish consumer spending remain weaker than average, it’s highly encouraging to see that household expenditure has now risen on an annual basis over the last year and a half,” said Visa Ireland boss Philip Konopik.
“With the combination of a continued increase in earnings and subdued price inflation, consumers are benefiting from more disposable income to enjoy trips away and recreational activities as the summer comes to an end,” he said.
The strongest spending, 9.4%, year-on-year, was in household goods, with recreation and hotels/ restaurants/bars up by 5.6% and 5.4%.
However, there was a marginal drop in health and education expenditure.
Meanwhile, IHS’s latest UK study shows that British households’ confidence about their financial situation held at its highest level since 2015 this month, as their concern about inflation eased and they were relaxed about prospects for the year to come.
In contrast to business surveys — which often show worries about how the UK’s government will handle EU withdrawal next March — household expectations for the coming year were the second-strongest since August 2016.
