There are few clouds on the horizon for customer spending right now
April was a bumper month for most sectors with e-commerce leading the charge.
IRISH CONSUMERS’ ONLINE shopping spiked last month, driving a marked overall increase in the amounts households were willing to spend.
The latest Visa Europe Irish consumer spending index recorded the second-highest monthly growth rate ever at nearly 10% year-on-year for April.
That increase was topped only by the February tally, when spending was up more than 11% – the highest growth since the index was launched in September 2014.
April’s rapid expansion was fuelled by record growth in e-commerce spending, which was up almost 19% compared to the same month in 2015. It was the largest monthly growth for the sector since the survey was launched.
Visa Europe’s country manager for Ireland, Philip Konopik, said bad weather in April likely boosted online spending, while a boom in travel and recreation turnover was a “clear sign” that households were more optimistic about their finances.
“This confidence can be seen right across the country with every county reporting a rise in new car registrations last month,” he said.
The latest motor industry figures showed new car sales jumped 28% in the first quarter of the year against the same period in 2015, pointing to people’s renewed confidence in their fiscal fortunes by their willingness to spend on big-ticket items.
Recent figures from the Central Bank also indicated the tide had turned on consumer confidence with the recovering economy.
The institution recorded the largest net increase in consumer lending since early 2011 in March. Total consumer loans advanced by Irish banks beat repayments by €119 million after years of people predominantly trying to pay down their debts.
A travel splurge
The largest increases in spending recorded in the latest Visa Europe survey came in the recreation and culture categories, which were up more than 20% compared to last year.
Spending on transport and communication, health and education, household goods and hotels, restaurants and bars all increased more than 10%.
Clothing and footwear was the sector that had the most meager rise with spending up less than 2%.
The survey was produced in conjunction with Markit, whose senior economist, Andrew Harker, said unseasonably cold weather in April likely hurt the clothing sector and this could turn around with better conditions in May.
“Falling unemployment and a lack of inflationary pressure should help to keep the consumer spending in the months ahead,” he said.
