Consumer spending remains strong despite global uncertainty
Irish consumers are continuing to spend despite global uncertainty and the enduring cost-of-living crisis, according to the latest spending report from
Bank of Ireland.
It suggests that debit and credit card spending rose by 6.5 per cent year-on-year, with consumer activity significantly outpacing the current 2 per cent rate of consumer price inflation.
The data suggest that household spending remains a key driver of economic momentum, with no evidence of a slowdown in expenditure, even in categories typically sensitive to economic sentiment.
Retail spending increased by 3.6 per cent, reflecting steady demand for goods including clothing, groceries and household items.
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Spending on services rose by 3.7 per cent, supported by continued demand for personal care, transport, and professional services.
Social spending surged by 6.4 per cent, with spending in restaurants climbing by 6.3 per cent, well above the 3.4 per cent inflation rate for this category.
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Accommodation spending also rose by 5.6 per cent, with prices in this segment remaining broadly stable.
There was no sign of a decline in spending on big-ticket items such as furniture, electrical goods, airline fares, or holidays – areas that often see early cuts when consumer confidence wanes.
While Irish consumer confidence dipped to two-year lows in April, according to the European Commission survey, sentiment rebounded somewhat in May.
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The decline in confidence was largely confined to concerns about the broader economic outlook. In contrast, consumer expectations regarding their intentions to make big purchases remained more resilient.
Bank of Ireland said that the divergence suggests that while Irish households are aware of global risks, they are not allowing these concerns to significantly influence their day-to-day or long-term spending decisions.
'The 6.5 per cent rise in card spending in May reflects a resilient economy and a willingness to continue making key purchases,' said Bank of Ireland chief economist Conall Mac Coille 'This broad-based growth across sectors highlights the strength and stability of household consumption, even in the face of international uncertainty.'
Separately, the latest Dublin Economic Monitor from the four Dublin local authorities shows 'a stable but cautious economy' being driven by growth in employment, retail spend and private sector activity, despite broader economic uncertainty.
The Dublin S&P Global Purchasing Managers' Index (PMI) showed that business activity in the capital's private sector increased in the first quarter of 2025, while the city's unemployment rate fell to 4.3 per cent.
According to Mastercard data, retail spending in the Dublin economy remained broadly stable in the first quarter of the year with a modest 0.2 per cent quarter-on-quarter increase recorded in the first three months of the year.
In the residential sector, the pipeline of new housing supply in Dublin continued to fall sharply, however.
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