Irish consumer spending returns to growth in March with +2.7% increase year-on-year

Visa’s Irish Consumer Spending Index, produced by IHS Markit, which measures expenditure across all payment types (cash, cheques and electronic payments), signalled a positive end to the first quarter of 2019 with regards to consumer spending. Household expenditure was up +2.7% year-on-year in March, after having ticked down in February (-0.6%).

While spending increased to the greatest extent in five months, the rate of growth was still weaker than the average seen since the series began in September 2014. Moreover, weakness in January and February meant that Q1 saw only a +0.8% year-on-year rise in spending, the slowest increase in the near five-year quarterly series.

The return to growth of overall expenditure mainly reflected signs of revival on the high street, with Face-to-Face expenditure up for the first time since last October (+2.0% year-on-year). Spending via eCommerce also increased in March, although the rise of +4.0% was the slowest in six months.

The timing of the Easter holidays compared to last year impacted on sector performance during March, as the splits are not adjusted for seasonal factors. Household Goods posted the strongest expansion in March, seeing spending rise at a substantial pace of +16.6% year-on-year. Marked increases were also recorded in Health & Education (+9.9%) and Hotels, Restaurants & Bars (+7.1%).

Recreation & Culture spending was up +4.0%, while both the Clothing & Footwear (+1.3%) and Transport & Communication (+4.2%) categories saw returns to growth at the end of Q1.The only two sectors to register declines in spending were Food & Beverages (-1.7%) and Miscellaneous Goods & Services (-4.2%).

Philip Konopik, Ireland Country Manager, Visa said:

“As the first quarter comes to a close, March saw a return to growth for Irish consumer spending. St. Patrick’s Day provided a welcome boost as the Hotels, Bars & Restaurants and Recreation & Culture sectors both experienced a rise in household expenditure as the public celebrated the national holiday. There was also a spike in expenditure on Household Goods, which rose at its fastest rate since November 2015.”

Andrew Harker, Associate Director at IHS Markit said:

“Although consumer confidence remained weak in March, Visa’s latest CSI signalled a greater willingness to spend at the end of the first quarter. Spending was up on the back of signs of revival on the high street and returns to growth in sectors such as Clothing & Footwear and Transport & Communication. Retailers will hope to see this improving trend continue over the important Easter period, but with political uncertainty remaining to the fore, further hesitancy among consumers can’t be ruled out.”