We are borrowing more, earning more, and spending more — and the food and retail sectors are reaping the benefits, accounting for almost half the jobs created over the last year.
Drawing on new data from the CSO, John McCartney, director of research at property consultants Savills, said a 6.2% rise in household disposable income — equating to €1.5bn — was largely attributed to a combination of improved employment and wage levels as well as modest tax cuts.
While the legacy of the bust continues to inspire people to save — €210m of the increase in household incomes has gone into savings — the majority has been spent, with total household expenditure rising 6% or €1.27bn in the last year.
The return to borrowing is highlighted in Central Bank data showing that spending has also been fuelled by increased consumer borrowing.
While outstanding consumer credit balances fell for 75 successive months until April 2016, there has been “a pronounced rebound” since then, said Mr McCartney.
Latest figures show a 4.6% increase in consumer borrowings over the year to June.
Car sales enjoyed the biggest year-on-year uplift, rising 13.6% compared to a 5.3% rise across the entire retail sector. Sales growth was also strong in other big-ticket items like furniture (+9.4%) and electrical goods (+8.6%).
Mr McCartney said some sectors may have gained temporary traction from Ireland’s participation in Euro 2016.
“We have seen before that television sales in the run-up to big sporting occasions can drive turnover in electrical goods stores. Bar sales were also notably stronger, with a 9.6% increase compared with June 2015, and this is consistent with large numbers of people congregating in pubs to watch the matches.”
Savills notes that the pick-up in retail sales generally, and food and beverage sales in particular, has been under way for some time. “Of the 47,000 new jobs created in the last year, 11,700 have been in the retail sector and 10,200 have been in the food and beverage sector. This means that 47% of all the net additional jobs in the Irish economy over the last 12 months have been in shops, bars, and restaurants.”
© Irish Examiner Ltd. All rights reserved