Big-spending consumers are driving ‘miraculous’ recovery

Irish consumers buying cars, homes and furniture are driving a "miraculous economic recovery", according to the latest spending monitor published by the Marketing Institute of Ireland and UCD's Smurfit Graduate Business School.

New findings from the quarterly Consumer Market Monitor show consumer spending making a significant contribution to Ireland’s economic growth.

There are now 1.96 million people at work in Ireland, up by 130,000 since the low point in 2012. This improved employment level is beginning to have a positive effect on the amount of disposable income available in the economy, the monitor says.

High sales volumes

The high sales volumes of new cars continued in the first nine months of 2015, with 114,446 cars licensed in the first three quarters of the year, up 31 per cent on 2014.

Property sales are also buoyant, with 21,876 residential properties sold in the first half of 2015, up 31 per cent on the same period last year.

Retail sales have also improved significantly. Sales volumes are up by 7.2 per cent in the third quarter when compared to last year. For the year to the end of September, retail sales have climbed by 6.2 per cent.

“Data from the Q3 2015 Consumer Market Monitor indicates that the consumer economy in Ireland is now in the midst of a broad-based recovery,” said Tom Trainor, chief executive of the Marketing Institute of Ireland. “Consumer confidence plays an important part in this recovery as people will only spend money when they feel optimistic about the future and their own financial security.”

Critical factor

Mary Lambkin

, professor of marketing at UCD’s

Smurfit School

and one of the authors of the monitor, pointed out that consumer spending accounts for over 50 per cent of GNP in Ireland and is a critical factor in driving recovery.

“Disposable incomes are at last beginning to show modest growth as a result of jobs growth and this, coupled with greater availability of credit, is leading to accelerated spending on many categories of goods and services,” she said.