The latest data from Visa's Irish Consumer Spending Index indicates that the slowdown in growth of household spending in Ireland continued in the final month of 2016.
This month’s data shows that consumer spending was up +3.6% year-on-year in December, marginally slower than the +3.9% rise in the previous month. Spending has increased continuously through the 28-month series so far but the latest rise was the slowest since it began in September 2014.
The rate of expansion has now eased in three consecutive months. Meanwhile, spending was up +4.0% year-on-year in the final quarter of the year as a whole, the slowest rise since the final three months of 2014.
While the overall rate of consumer spending has continued to slow, December was a positive month as all sectors with the exception of Clothing & Footwear, recorded increases in spending.
Household Goods expenditure rose at the same solid pace as in the previous month (+4.3%), with consumers purchasing items like home appliances as gifts.
The Hotels, Restaurants & Bars sector saw the rate of expansion quicken to a three-month high of +5.8% year-on-year, with a spike in entertainment over the festive period. Food & Drink also posted a return to growth of spending (+2.9% year-on-year) in December following a decline in November, benefiting from increased trade for groceries for Christmas meals.
Transport & Communication posted the strongest rise in spending of the eight broad sectors covered (+11.0% year-on-year) during December, despite the rate of growth easing. Recreation & Culture also posted a weaker rise in expenditure – its slowest since May 2015.
The Clothing & Footwear sector continues to struggle and was the only sector to see a fall in spending over the year, with expenditure declining for the fifth month running. The latest reduction, however, was fractional (-0.2% year-on-year) and the weakest in this negative sequence.
There remained a divergence in performance between the Face-to-Face and eCommerce channels in December with the sterling exchange rate continuing to entice shoppers to purchase from UK online retailers.
eCommerce expenditure continued to increase at a substantial pace (+15.4% year-on-year), despite easing slightly from November's record. Meanwhile, Face-to-Face spending decreased for the third successive month, but the -0.3% year-on-year decline was only marginal and better than the November performance.
Commenting on the figures, Country Manager at Visa Ireland, Philip Konopik said, "The large shift to online shopping in the run-up to Christmas continued in December with consumers seeking to take advantage of the value on offer from UK online retailers due to the sterling exchange rate. Despite this there are a number of positives to be drawn from the data, with a range of sectors such as hotels, restaurants, bars and grocery retailers clearly benefiting from the festive period."
He added, "The last quarter has seen the growth in overall consumer spending slip below five percent each month however, and it will be interesting to observe whether this trend continues into the first quarter of 2017."