Brexit fears take economic toll as concerns lead to drop in spending
Consumer sentiment in Ireland slowed significantly in the second half of last year, as fears over Brexit took hold.
Spending for the first three quarters of 2016 rose by 4.2pc; however, the final growth figure for the entire year is expected to be at around 3.5pc - an indication of a notable weakening in the final quarter.
Separate data released by the Central Bank outlines how spending on eCommerce rose to its highest point to date, with Irish consumers spending €869m in November, perhaps a reflection of shoppers' desire to secure a bargain on Black Friday.
Concern over the implementation of Brexit is the major downside risk for 2017, according to the 'Consumer Market Monitor', which was published by the Marketing Institute of Ireland and the UCD Michael Smurfit Graduate Business School.
"A reason for optimism is that the fundamental factors underpinning the consumer economy are still very strong, and should provide a counter-balance to any external shocks," said Mary Lambkin, Professor of marketing in the UCD School of Business.
The report states that Irish levels of household indebtedness are now at the lowest rate since a peak at €150bn in March 2008.
Irish household debt has been declining at a steady pace ever since, and the latest figures show overall debt stood at €90bn in the final quarter of last year. The UCD report shows there has been a steady fall in outstanding mortgage debt since the peak of the property bubble. Outstanding property loans were at €73bn in the fourth quarter of 2016, down from almost double that figure (€124bn) in 2008.
New car registrations rose by 30pc in the first half of last year, but were also down in the second half of the year.
Food sales rose by 1.5pc but prices remained somewhat stagnant with the value of sales going up by just 0.5pc. Clothing and footwear sales rose by 2.4pc, while pharmaceuticals and cosmetics were up by 2.8pc.