Boom is back as consumer spend rises
According to the latest Visa consumer spending index, which measures expenditure across all payment types, there was a 5.3% year-on-year increase in household expenditure — the fastest expansion in spending seen since July 2016.
Continuing the recent trend, overall growth in consumer spending was led by face-to-face expenditure. Last month saw a 7.3% year-on-year expansion in spending on the high street, the most marked increase since February 2016. Face-to-face expenditure has now risen in each of the past five months.
All eight monitored sectors in Ireland saw expenditure increase during January — the second time in three months in which this has been the case.
The sharpest expansion was recorded in the household goods category, where spending was up 13.7% year-on-year. This was the quickest rise in 20 months.
It was closely followed by recreation and culture and hotels, restaurants and bars where expenditure on an annual basis rose by 8.3% and 7% respectively.
There was also positive news for the clothing and footwear category, where spending rose by 6.2%. This represented the third successive month of growth for the category, with the latest growth the strongest in almost two years.
The food and drink category showed growth for the fifth month in a row at the start of 2018, although at 3.4% year-on-year, the rate of growth was weaker than seen in December
Health and education spending grew 4.1% year-on-year in January, while transport and communication (+6.5%) and miscellaneous goods and services (+3.9%) also showed solid growth
ECommerce spending rose 2.1% on an annual basis in January but the growth was weak relative to the series average and the slowest in the current three-month sequence of expansion.
The index also highlights the resilience of the consumer spend here compared to Britain, which had a difficult start to 2018 as consumer spending fell for the fifth month in a row on an annual basis. This has been blamed on households continuing to face rising living costs and lacklustre wage growth.
Overall consumer expenditure in Britain fell by 1.2% year-on-year in January, with spending having now fallen in eight of the past nine months.
Country manager with Visa Ireland, Philip Konopik, said the figures are “extremely positive”, particularly for the Irish high street.
“January was another extremely positive month for Irish consumer spending, representing the strongest year-on-year growth for a year and a half. This is reflective of the continuing fall in unemployment and buoyant consumer confidence in the Irish economy, with shoppers demonstrating real resilience by continuing to increase their spending into the new year.
“The ongoing revival of the Irish high street was a particular highlight, with the data recording the fifth consecutive month of year-on-year face-to-face growth, which made a significant contribution to the overall rise in Irish spending in January,” he said.
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