Table 1.1 Seasonally Adjusted Gross Household Saving by Component (€million) | |||
Total Disposable Income (B.6g + D.8) | Final Consumption Expenditure (P.3) | Gross Saving Ratio | |
2022Q4 | 36,463 | 32,788 | 10.08% |
2023Q1 | 37,086 | 33,375 | 10.01% |
The household saving rate in the first quarter of 2023 was 10.01%. This was similar the rate of 10.08% in the last quarter of 2022. Seasonally adjusted, both Total Disposable Income (TDI) and Final Consumption Expenditure (FCE, P.3) rose in the quarter.
The saving rate is largely unchanged this quarter but had been going down steadily since the second peak in saving in the first quarter of 2021, as shown in Figure 1.1. A declining saving rate is an indicator of fewer resources available for investment to drive future economic growth. However, the exceptional nature of saving during the pandemic makes the current decline a return to normality. At 10.01% this quarter, the rate has now descended to slightly below the average rate in 2019 (10.20%).
We can see from Figure 1.1 that the trend in Ireland's saving rate broadly mirrored that of the rest of Europe during the pandemic, with a peak in 2020 and a smaller peak in 2021. Ireland's saving rate was below the EU total before the pandemic but higher during the COVID-19 restrictions. Data available so far indicates that it is now returning a rate below the EU aggregate.
While the saving rate is declining, it is still positive. Households are continuing to add to their wealth. Deposits in Irish credit institutions (like banks) grew by €2,582m in the first three months of the year according to the Central Bank of Ireland. The Bank also indicates that on the other side of the account, additional loans from Irish banks amounted to just €45m. Households also added to wealth in the form of real assets (mainly new homes) as capital spending (P.5) was €2,015m in the period. Taken together as an institutional sector, after a year of high inflation, Irish households are able to buy new homes without borrowing significantly, and still add to their money on deposit.
This release incorporates new data from the Annual National Accounts and Quarterly National Accounts. The most significant change is the upward revision in household FCE for 2021 and 2022 due to new data in these releases. This higher expenditure has the effect of lowering the saving rate in these years, compared to the rate shown in earlier vintages of this data.
The seasonally adjusted data series which includes Gross Disposable Income, Personal Consumption of Goods and Services and Gross Saving of the Household incl. NPISH sector is available on PxStat. Only the most significant transactions are shown in the table for each sector in this release: the entire unadjusted series for all variables published in this release are also available at the same link. Price-adjusted Total Disposable Income and Final Consumption Expenditure of Households are shown in PxStat ISQ04. See Background Notes for definitions of the terms used.
EU-27 | IE | |
2018-Q1 | 11.25 | 7.99091582269811 |
2018-Q2 | 11.61 | 8.80595465824151 |
2018-Q3 | 11.62 | 10.047980376552 |
2018-Q4 | 12.06 | 10.7663737590039 |
2019-Q1 | 12.42 | 8.94792649235543 |
2019-Q2 | 12.53 | 9.22898049546448 |
2019-Q3 | 12.1 | 10.5905527795965 |
2019-Q4 | 12.19 | 12.0146272247638 |
2020-Q1 | 16.16 | 19.8150123984217 |
2020-Q2 | 24.38 | 32.53684524019 |
2020-Q3 | 16.03 | 20.2554346112714 |
2020-Q4 | 18.24 | 23.7104895819198 |
2021-Q1 | 20.55 | 27.9605782889091 |
2021-Q2 | 18.62 | 19.4781715020879 |
2021-Q3 | 14.02 | 18.0411450726916 |
2021-Q4 | 13.64 | 15.3883197514006 |
2022-Q1 | 14.24 | 13.930371203004 |
2022-Q2 | 13.04 | 13.6826867965934 |
2022-Q3 | 12.01 | 12.7508625324144 |
2022-Q4 | 12.61 | 10.0781266223821 |
2023-Q1 | : | 10.0083103339259 |
Incomes of households before inflation rose slightly in the first quarter of the year. Overall household income is driven by pay to workers (D.1). Between January and March of this year, average pay per hour and the number of people in work both grew, driving up total wages and salaries at current prices (not taking account of inflation). Figure 1.2 illustrates the changes in wages by economic sector in the quarter after adjusting for seasonal factors (such as less shopping after Christmas than before). The wage bill increased across almost all activities. Growth was highest in Distribution, Transport, Hotels & Restaurants and Professional, Admin & Support Services. There was a decline in compensation of employees in Public Administration, Education & Health but this was due to Q4 of 2022 being exceptionally high because of back pay being included.
Higher take-home pay meant higher taxes (D.5) and PRSI (D.61) paid by households (see Table 1.2, below). There was also higher investment income received (D.4) on assets such as pension fund holdings as interest rates have risen.
sector | Change (Seasonally Adjusted) since Q4-2022 €m |
---|---|
Agriculture, Forestry and Fishing | -6.99424509032542 |
Industry (excl. Construction) | 143.437168002361 |
Construction | 16.2756131739252 |
Distribution, Transport, Hotels and Restaurants | 277.621132249407 |
Information and Communication | 67.9959958692584 |
Financial and Insurance Activities | 128.507327625717 |
Real Estate Activities | 9.42257378667136 |
Professional, Admin and Support Services | 175.529250706835 |
Public Admin, Education and Health | -88.5732012080698 |
Arts, Entertainment and Other Services | -3.33128042211501 |
Get the Data: Compensation of Employees by Economic Activity
However, while the nominal Household Total Disposable Income (TDI) rose, inflation largely wiped out any increases in household revenue compared to the last quarter of 2022.
Real TDI is estimated by first deflating the current price estimate of TDI. The deflator used is the implicit deflator of household consumption: that is, the ratio of current price to constant price Individual Consumption Expenditure (P.31). This price-adjusted TDI is then seasonally adjusted using an X-13 model, the model used for seasonal adjustment in the rest of the accounts.
Figure 1.3 shows TDI before and after adjustments.
TDI Current Price Unadjusted | TDI Current Price Seasonally Adjusted | TDI Constant Price Seasonally Adjusted | |
2020Q1 | 31.53582 | 31.74478 | 32.18115 |
2020Q2 | 31.8593 | 30.83098 | 32.27809 |
2020Q3 | 30.60199 | 30.29008 | 31.03066 |
2020Q4 | 29.80879 | 30.98469 | 31.98905 |
2021Q1 | 31.87601 | 32.1073 | 32.40276 |
2021Q2 | 33.79273 | 32.68068 | 32.68165 |
2021Q3 | 34.23786 | 33.86531 | 33.21313 |
2021Q4 | 32.43204 | 33.68631 | 32.84483 |
2022Q1 | 33.93747 | 34.24727 | 32.56053 |
2022Q2 | 36.4053 | 35.20832 | 32.97997 |
2022Q3 | 36.18072 | 35.75936 | 32.92754 |
2022Q4 | 35.16149 | 36.46291 | 32.86037 |
2023Q1 | 36.72591 | 37.08635 | 32.92559 |
Figure 1.4 shows some international comparisons of gross disposable income compiled by the OECD. Household Gross Disposable income is given per capita, rather than for the country as a whole. It is given in constant prices to remove the effect of inflation. The first quarter of 2007 is set to 100 in each case to show the trends since then, and the graph shows the average for each year. The reference year of 2007 was the height of the 'Celtic Tiger' boom and Irish incomes were higher than the other countries at that time. Starting from their higher level, Irish households experienced a more significant decline than UK, Denmark and Netherlands. The graph shows household incomes for Ireland going down between 2008 and 2014. It was ten years before incomes returned to their 2007 level. Incomes here had a sharper decline than in other countries, but since 2017, they have had a sharper recovery.
Row Labels | IE | NL | UK | DK |
---|---|---|---|---|
2007 | 100.8825 | 100.2675 | 99.9575 | 102.8175 |
2008 | 104.03 | 101.11 | 98.5575 | 101.74 |
2009 | 103.4925 | 101.9675 | 99.3125 | 102.0825 |
2010 | 103.245 | 101.525 | 99.435 | 104.915 |
2011 | 96.285 | 101.0375 | 96.2825 | 105.6225 |
2012 | 95.8425 | 100.3575 | 97.855 | 104.9925 |
2013 | 94.1925 | 99.0075 | 99.26 | 105.725 |
2014 | 93.8975 | 100.1625 | 100.9275 | 105.9225 |
2015 | 96.6325 | 101.3725 | 106.3825 | 109.2575 |
2016 | 99.33 | 103.0725 | 106.26 | 113.0925 |
2017 | 102.955 | 103.5575 | 106.7075 | 114.8375 |
2018 | 104.4475 | 105.7675 | 108.6375 | 116.9675 |
2019 | 107.5925 | 107.7275 | 110.32 | 119.425 |
2020 | 112.3575 | 109.91 | 108.4325 | 119.2175 |
2021 | 114.93 | 111.51 | 109.36 | 118.03 |
2022 | 114.1075 | 112.6725 | 107.2325 | 118.275 |
Get the Data: OECD
There was a slight increase in spending in the quarter (after usual seasonal fluctuations were taken into account): this increase was due to larger volumes of goods and services being consumed, as well as price inflation. The Retail Sales Index shows highest volume increases in Clothing & Footwear and Furniture & Lighting, while the Services Index found growth in Food Service (restaurants) and Other Services (such as gambling and hairdressing).
At the end of March, the Consumer Price Index showed a 3-month rise of 1.9% and an annual increase of 7.7%. The largest contributors to this increase in the cost of living were: Housing, Water, Electricity, Gas & Other Fuels; and Hotels & Restaurants.
Learn about our data and confidentiality safeguards, and the steps we take to produce statistics that can be trusted by all.