29 Nov 2019

Irish Economy: Retail sales growth slips but remains healthy

Annual growth in retail sales volumes slipped to 3.0% in October from 3.8% in September.

Growth in sales values also slipped back in October, to a modest 1.4% from 2.4% the previous month (lower growth in values vs. volumes reflects an element of price discounting in certain sectors). Excluding the volatile motor trades industry, core retail sales volumes were a similar 3.2% higher y/y in October. Looking at some of the other sectors, growth in Electrical Goods continues to lead the way with y/y sales volumes 15.8% higher in October. Growth in y/y sales values in this sector was significantly lower at 5.5%, illustrating the price discounting mentioned earlier. Elsewhere, Furniture & Lighting and Pharma products were the next best performers in the month, while Department Stores and Bars posted y/y declines in sales in October.

Although consumer sentiment measures have been noticeably weaker in recent months, the latest data indicate that the retail sector continues to perform quite well in spite of consumers’ gloomy outlook.

Irish Economy: Mortgage approvals +10% in October; led by first-time buyers

Total mortgage approvals reached €1.02bn in October, +9.8% y/y.

This rate of growth is in line with the 10.0% y/y growth in the year to October and comes on the back of two sluggish months for mortgage approvals in August and September. The first-time buyer segment continues to strongly outperform the mover-purchaser segment. FTB approvals were +23% y/y by value in October (+16% by volume), while mover-purchaser approvals were +2% y/y by value (-1% by volume). FTB approval values are +19% YTD, with the mover-purchaser segment +3% YTD. The average size of mortgage approvals in October was €226k, +3.6% y/y. The FTB segment also led the way here with the average approval +6.0% y/y vs. +2.5% for mover-purchasers. Taking a 3-month view to account for the “lumpiness” in the data, the average FTB mortgage approval was +3.6% y/y.

These data chime with other indicators which show a much stronger FTB property market at present.

Leaders debate with two weeks to go

Yesterday marked exactly two weeks until the 12 December general election. Over the last week, much of the attention has been on the party manifestos, with much of the media focus being on the respective spending plans. In response, there looks to have been little change in polling, a far cry from 2017 where Tory social care proposals contributed to a sharp weakening in Conservative Party support. 

Most of the polls point to an average Tory lead of 11%. However, the week’s most hotly anticipated results were from YouGov which published its MRP (multilevel regression and post-stratification) poll, given it accurately predicted a hung parliament in 2017. This estimated a Tory majority of 68 and triggered a strengthening in GBP afterwards. It is worth noting that the YouGov poll excludes Northern Ireland. If Sinn Fein maintains the 7 seats it won in 2017, and then exclude 2 Tory and 1 Labour deputy speakers, the Conservatives’ effective majority would be 75. 

Still two weeks remain a long time in politics, with key events over the next week being a head to head debate between Boris Johnson and Jeremy Corbyn tonight at 20.30, preceded by a seven-way election debate between the main parties this Sunday at 19.00.

GfK consumer confidence

Consumer confidence remained unchanged in November at -14, matching expectations. Survey compilers GfK pointed to consumers being in a ‘wait and see’ mode given the upcoming general election and Brexit. Indeed, this was evident in the survey’s subcomponents where there was very little change on the month. The only area which saw an notable change was consumers’ confidence about the general economic outlook 12 months ahead which rose by 3pts, albeit from a weak level (-34).

Economic Releases

UK 09.30 Mortgage approvals

EU 10.00 CPI

EU 10.00 Unemployment

UK 19.00 BBC debate between senior party leaders