The release of the Q1 2011 National Accounts yesterday has sparked a variety of responses such is the inconsistency in the figures between differing quarterly changes in GDP and GNP as well as substantial revisions to the annual figures to 2010.
Here is a chart that uses two CSO data series:
- Quarterly estimate of private consumption at constant market prices (seasonally adjusted)
- Quarterly estimate of the population aged 15 plus from the QNHS
Although the CSO may not approve we will use these to create a rather crude measure of per capita consumption. There are probably a number of difficulties with this approach which was prompted by a comment on recent falls in the Retail Sales Index. Is the index falling because people are spending less as a result of decreased incomes or is the index falling because there are less people to spend as a result of outward migration? We attempt to address that here.
So what do we see when we divide 1 by 2?
After flat lining for four quarters from the end of 2009, this series turned downward in the final quarter of 2010 and this has continued into 2011. Per capita consumption fell 1.7% in the quarter and is down 2.5% on the year. We can see that the most severe fall occurred during 2008 and we are now 11.5% below Q1 2008.
It did appear that through 2009 and 2010 the worst of the fall was behind us but the start of 2011 undermines that view with per capita consumption resuming its downward path. This will not be to the approval of Minister for Finance, Michael Noonan based on this report.
In an appeal aimed at those Irish people who are holding a total of €134bn in savings accounts, Mr Noonan said it was time to return to normal shopping habits.
"What we really need is for people to go into the shops and start buying again,'' said Mr Noonan in a message to those who had the cash to spare.
“If that starts, with tourists visiting our shores stimulating the retail side, and is followed by our own ordinary citizens going about their shopping and beginning to spend again, then we begin to lift out of the crisis," he said.