The 11% rise in February — compared to February 2015 — by households includes a 21% jump in spending recreation and culture, according to Visa Europe’s Irish consumer spending index. That category includes sharp rises in outlay on the likes of cinema tickets and sporting goods, while an 18% jump was seen on spending in hotels, restaurants and bars.
While the year-on-year data includes the extra day due to the leap year — or 3.5% more days than February 2015 — the overall spending rise is still the biggest in any month since the company began tracking Irish spending 18 months ago.
Visa Europe’s index is based on spending on all its debit, credit and prepaid cards, used to make and average 36m transactions a month.
The monthly analysis, done in conjunction with economic index specialists Markit, has shown constant rising spends since the measure began. But the growth rates have been gathering pace since the last quarter of 2015.
The 11% headline spending increase compares to a 7.5% annual rise in January, and is much higher than the previous record increase of 8% in November 2015.
“Households in Ireland look to be taking advantage of improving labour market conditions and low inflation to spend on discretionary items. This all suggests that the first quarter of 2016 has seen the Irish economic recovery continue apace,” said Markit senior economist Andrew Harker.
Household goods saw 11.5% growth last month, slightly up on January’s increase, with transport and communication (up 11.2%), buoyed by car sales rises and more people booking trips abroad than this time last year. Food, drinks, and tobacco (up 9.1%), and health and education (up 8.4%) had the next-highest increases.
While online spending accounts for the bulk of the increases, up 15% year-on-year, there was also a record 9% increase in face-to-face expenditure. The previous record was a 7% jump, year-on-year, last November.
“The rise in spending was quite diverse with new car sales up 35% and items like flowers and jewellery proving popular during the month. It was particularly encouraging to see a record increase in high street spending in February as the economic recovery continues to take hold,” said Visa Europe’s country manager in Ireland Philip Konopik.
“A clear sign of growing confidence of the retail community was the expansion plans announced in recent weeks by a number of business including SuperValu, Maxol and Centra. A recent survey by the Irish Hotels Federation has also shown that 82% of hoteliers are seeing an increase in business levels compared to this time last year,” he said.
A comparison with other European countries shows that Valentine’s Day payments with Visa in Ireland were among the highest. The average €55 spend on flowers was higher than the UK’s €47 or Germany’s €33, while ‘dinner-and-a-movie’ dates were also popular.
As the figures include debit cards, they may not be indicative of consumers buying more items on credit. However, rises could also reflect more retailers accepting debit cards, or reducing minimum spending limits.