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Households

Households

CSO statistical publication, , 11am
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
2022Q436,46332,78810.08%
2023Q137,08633,37510.01%

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-27IE
2018-Q111.257.99091582269811
2018-Q211.618.80595465824151
2018-Q311.6210.047980376552
2018-Q412.0610.7663737590039
2019-Q112.428.94792649235543
2019-Q212.539.22898049546448
2019-Q312.110.5905527795965
2019-Q412.1912.0146272247638
2020-Q116.1619.8150123984217
2020-Q224.3832.53684524019
2020-Q316.0320.2554346112714
2020-Q418.2423.7104895819198
2021-Q120.5527.9605782889091
2021-Q218.6219.4781715020879
2021-Q314.0218.0411450726916
2021-Q413.6415.3883197514006
2022-Q114.2413.930371203004
2022-Q213.0413.6826867965934
2022-Q312.0112.7508625324144
2022-Q412.6110.0781266223821
2023-Q1:10.0083103339259

Household Income

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.

sectorChange (Seasonally Adjusted) since Q4-2022 €m
Agriculture, Forestry and Fishing-6.99424509032542
Industry (excl. Construction)143.437168002361
Construction16.2756131739252
Distribution, Transport, Hotels and Restaurants277.621132249407
Information and Communication67.9959958692584
Financial and Insurance Activities128.507327625717
Real Estate Activities9.42257378667136
Professional, Admin and Support Services175.529250706835
Public Admin, Education and Health-88.5732012080698
Arts, Entertainment and Other Services-3.33128042211501

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

International Income Comparison

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 LabelsIENLUKDK
2007100.8825100.267599.9575102.8175
2008104.03101.1198.5575101.74
2009103.4925101.967599.3125102.0825
2010103.245101.52599.435104.915
201196.285101.037596.2825105.6225
201295.8425100.357597.855104.9925
201394.192599.007599.26105.725
201493.8975100.1625100.9275105.9225
201596.6325101.3725106.3825109.2575
201699.33103.0725106.26113.0925
2017102.955103.5575106.7075114.8375
2018104.4475105.7675108.6375116.9675
2019107.5925107.7275110.32119.425
2020112.3575109.91108.4325119.2175
2021114.93111.51109.36118.03
2022114.1075112.6725107.2325118.275

Get the Data: OECD

Consumption

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.

Table 1.2 S.1M Households and Non-Profits