Irish consumer spending rises sharply again in May as eCommerce continues to drive expansion

According to Visa Europe's Consumer Spending Index, Irish consumer expenditure across all payment types (cash, cheques and electronic payments) continued to rise sharply in the year to May. Spending was up +9.2% year-on-year, slightly slower than the +9.6% rise in April, but still among the strongest in the 21-month history so far.

Rising expenditure was recorded across each of the eight broad sectors covered by the report. For the sixth successive month, the strongest expansion in spending was seen in the Recreation & Culture category as consumers visited tourist attractions and made bookings through travel agents. At +19.2% year-on-year, the rate of growth was substantial, despite easing slightly from that recorded in April.

Further evidence of spending in the leisure economy was provided by a double-digit increase in expenditure in the Hotels, Restaurants & Bars sector (+13.4% year-on-year). The rate of growth in this category was the fastest in three months.

Further substantial increases in household spending were recorded in the Transport & Communication (+14.9%) and Household Goods (+13.4%) categories, with rates of expansion quickening in both cases.

Channel data showed that overall expenditure growth continued to be driven by eCommerce categories. Online spending was up +18.6% year-on-year, unchanged from the previous month's record. Meanwhile, at +5.1% year-on-year, Face-to-Face expenditure rose at a slower pace than seen in April.

After having slowed to an 18-month low in April, the rate of growth in spending on Clothing & Footwear rebounded in May and was the sharpest since February (+6.2% year-on-year). Food, Beverages & Tobacco registered a modest, but slightly faster increase in spending. The least marked expansions in expenditure were recorded in the Health & Education and Miscellaneous Goods & Services categories.

Philip Konopik, Country Manager, Ireland, Visa Europe said:

“The latest data from the Irish Consumer Spending Index is another boost for the economy and it is positive to see all sectors benefit from increases in expenditure levels. Ireland’s participation in Summer sporting events will have benefited a number of sectors with numerous electronics retailers running promotions on televisions in the run-up to the championships and fans booking last minute packages to events. The strong recorded spending in the leisure economy is perhaps indicative of the growing ‘experience economy’ here in Ireland, with more and more people prioritising their spend on experiences over their spend on physical things or products.”

Andrew Harker, Senior Economist at Markit said:

“The strong start to 2016 for Irish consumer spending continued into May, with the rate of growth suggested by Visa Europe’s Irish Consumer Spending Index little-changed from that seen in April. The strongest growth rates were seen in categories related to leisure activities, with tourist attractions and travel agents among the beneficiaries. Irish households continue to embrace eCommerce, with the rate of expansion in May unchanged from April’s record.The Visa data suggest that the current environment of rising wages, falling unemployment and a lack of inflationary pressure is continuing to encourage consumers to spend money.”