Irish consumer confidence has avoided massive British slump

The property sector is struggling, however...

Irish consumer confidence has avoided massive British slump

Mall cultural in Jakarta, Indonesia by Jonathan McIntosh, 2004

Irish consumer spending has not been affected by the Brexit vote thus far, with spending in the second quarter of the year up 5%.

When compared to the UK's consumer confidence taking its biggest hit in 21 years, confidence remains strong in Ireland, according to the Consumer Market Monitor (CMM) from the Smurfit Business School and the Marketing Institute.

Household debt is now at its lowest in a decade and is declining 2.4% every year.

The new study also shows a 7.8% increase in the sale of services year-on-year.

The only area that hasn't seen an increase in sales is property, which has suffered a 7% drop this year with no sign of a short-term pickup.

The CMM indicates there had only been 17,743 residential sales transactions to the end of May this year, compared to the 48,700 sales for the whole of last year.

UCD Smurfit marketing professor Mary Lambkin said:

“The imbalance of consumer spending and property sales needs to be addressed so as to bring the economy into better balance."

Mortgage approvals were also down 11% for the first five months of the year. Growth for 2016 is expected to be below 5%.

Elsewhere, Retail Ireland has called on the Government to offer the retail sector more protection against the effects of the Brexit vote.

The group's own latest figures suggest retail spending has slowed in recent weeks, losing the positive momentum from the first half of the year. 

Books and magazines were badly affected, falling from 7.7% at the end of March, to 4.2% by the end of June.

Director of Retail Ireland, Thomas Burke, says if the trend continues, it could have serious implications for the sector:

"We've come through six or eight years of very difficult times for the Irish retail sector and for Irish consumers indeed.

"And the Irish consumer has been scarred by that experience. Any sign of uncertainty now, we see quite quickly that reflected at the tills. Anything which causes the consumer to question a purchase is definitely a concern and the first sector to be hit by consumer uncertainty tends to the Irish retail sector."