Consumer spending rose by 3% in 2015
The growth in employment over the past few years is currently mirroring the amount of disposable income circulating in the economy. That’s according to the latest Consumer Market Monitor (CMM) published by The Marketing Institute of Ireland and UCD Michael Smurfit Graduate Business School, which indicates that the consumer economy in Ireland is now showing strong evidence of a broad-based recovery.
Domestic demand, currently growing at close to 4 per cent, is now the main driver of this economic growth. Consumer spending was up by 3 per cent in 2015 and is expected to be the main driver of growth in 2016 and 2017.
Tom Trainor, Chief Executive, The Marketing Institute of Ireland, said: “The remarkable economic growth we are seeing is due to domestic demand, driven by increasing Irish household wealth as property values recover and consumers make progress in paying down debt, pushing consumer confidence to the highest level in a decade.”
Mary Lambkin, Professor of Marketing, UCD Smurfit School, and one of the authors of the Monitor, said: “The improvement in the labour market has been the most important factor driving the recovery, with the average annual employment growth of over 2 per cent since early 2012.There are now 1.98 million people at work, up by 158,000 since the low point in 2012, contributing to the long anticipated increase in the amount of disposable income circulating in the economy.”
Recent Trends
All product categories except fuel experienced growth in Q1 2016, up 6.5 per cent in volume and 4 per cent in value. Most remarkable is the significant growth displayed by sectors that have been weak throughout the recession, such as bars and newsagents. In summary:
· Food sales up 5.8% in volume and up 5.2% in value
· Non-specialised stores (supermarkets) up 6.0% in volume and 5.4% in value
· Fuel down -0.4% in volume and up 2.6% in value
· Clothing, footwear and textiles up 12.2% in volume and 8.7% in value
· Household equipment up 5.0% in volume and 2.9% in value
· Department stores up 10.2% in volume and 7.6% in value
· Pharmaceuticals and cosmetics up 6.1% in volume and 4.2% in value
· Bar sales up 7.6% in volume and up 8.2% in value
· Books, newspapers, stationery up 6.5% in volume and 7.8% in value