Ireland's consumer spending takes Brexit hit
The report, compiled by the Marketing Institute of Ireland and University College Dublin's Michael Smurfit Graduate Business School, showed 2016 was a year of two halves in the Irish consumer economy - the first half showed very strong growth, but this slowed down across all sectors in the second half.
"This is reflective of the global uncertainty caused by the Brexit vote in the UK, as well as the drama surrounding the U.S. presidential election," it said.
Consumer spending growth rose by 4.2 percent in the first three quarters of 2016 year-on-year, but it is expected that the final figure for the year will be closer to 3.5 percent, according to the report.
This is one percent lower than the 4.5-percent growth achieved in 2015, but it is still a very solid performance, which is better than any other European Union (EU) member states, it said.
It added Ireland's consumer spending was significantly higher than the growth in consumer spending in Britain, which averaged 2.8 percent in 2016, and Germany, which averaged 1.9 percent.
The report said the signs were quite positive for 2017, although there were two competing forces affecting growth.
"On the one hand, consumer fundamentals remain very strong -- the population is growing quickly, employment is still increasing, inflation is low and the majority of firms expect to give pay increases next year. On the other hand, the uncertainties surrounding the implementation of Brexit imply some downside risk," it said.
The report said the consumer economy was in a positive state in 2017 and that most forecasts suggest consumer spending growth ranging from 2.5 to 3.5 percent in 2017. ■