13/1/2012: Irish Household Income and Consumption: Q3 2011

The latest data on disposable income (Institutional Accounts) from CSO presents the picture of real recession ravaging Irish economy. Here are the core details from Q3 2011 - the quarter when Irish economy tanked once again in terms of aggregate GDP and GNP.

• Gross disposable income of Irish households in Q3 2011 amounted to €21,761 million - a decline of 4% yoy and a drop of 4.3% qoq.
• By use of disposable income (separate database proving longer historical series), gross disposable income of households dropped 3.8% yoy and 4.2% qoq.
• Final consumption has declined 3.8% yoy and 2.5% qoq.
• Gross savings of the households fell 3.9% yoy and 11.6% qoq

Using Q1-Q3 2011 data we can compute expected annualized series for 2011, which are shown in chart below. In annualized terms:

• 2011 is forecast to see gross disposable income of Irish households drop 2.9% yoy on 2010 and reach -14.2% cumulative fall on the peak at 2008
• Final household consumption expenditure is set to fall 2.7% yoy and 16.2% on peak at 2008
• Gross household savings is expected to fall 4% yoy and 17% on the peak in 2009

 Of course, in the above, Gross household savings includes repayments of debts, which is reflected in the fact that since the beginning of the crisis, our savings were rising, just as out incomes tanked.

03/07/2011: Household Credit: latest data

Some more analysis of new lending - based on CBofI data through April 2011.

Household loans and consumer loans are covered in this post. So house purchase loans first:

• Rates for the loans for House Purchases floating and up to 1 year fixation have risen from 3.09% to 3.20% in April 2011, relative to March. Historical average rate is 3.743% and the average rate since the beginning of the crisis (January 2008) is 3.574%. Current rates are above their 12mo MA of 2.959%. It is interesting to note that this data clearly shows that there is no statistically significant easing of rates during the crisis as crisis period average rates are not statistically significantly different from those for the entire history of the data series. Another interesting point is that when house purchasers are concerned, volatility of retail rates has risen during the crisis: the historical standard deviation of the series is 0.827 while post-January 2008 standard deviation is 1.072.
• Volumes of loans in the above category has declined from €1.190 billion issued in March 2011 to €1.092 billion in April 2011. Again, current rates of issuance are signaling continued credit tightening: historical monthly average issuance stands at €2.577 billion, while issuance since January 2008 averages €2.0 billion.
  
• Rates for the loans for House Purchases, over 1 year fixation have also increased mom in April from 4.23% to 4.29%. The rates are now above their historical average of 4.213% but below their crisis period average of 4.34%. April rate is above 12mo MA of 4.115%. As in the case of floating rate loans, fixed rate loans rates also risen in volatility during the crisis with overall historical standard deviation for the rates at 0.641 and January 2008-present standard deviation of 0.723.
• However, good luck to anyone trying to get these loans. Fixed rate loans for House Purchases issuance fell from €568 million in March to €331 million in April. New issuance of these loans is now well below historical average monthly volumes of €705 million and below crisis-period average of €521 million. Although 12mo MA is above the crisis average at €526 million.

A chart:
But what about consumer loans not designated for house purchases?

• Cost of consumer credit for floating loans and loans up to 1 year fixation fell from 6.02% in March 2011 to 5.23% in April. Thus, April rates were below their historical monthly average of 5.584%, their crisis period average of 5.565% and their 12mo MA of 5.640%. Note that crisis period was associated with higher volatility of rates in this category as well, with standard deviation rising from historical 0.836 to crisis-period 1.099.
• In terms of volumes of loans issued in the above category, the volume increased from €134 million to €156 million between March 2011 and April. However, volume of new loans issuance remains well below its historical average of €393 million, crisis-period average of €378 million and 12mo MA of €193 million.
• Cost of consumer credit for fixed loans (over 1 year) has fallen from 10.09% in March to 9.90% in April 2011, with current rate still above historical average of 8.589% and crisis period average of 9.494%, but is now below 12mo MA of 10.217%. Interestingly, volatility of rates charged on these types of loans has fallen from historical standard deviation of 0.962 to crisis-period standard deviation of 0.695.
• Again, good luck securing such loans, though, as volumes issued declined from €60 million in March 2011 to €51 million in April. Historical average issuance stands at €169.5 million, while crisis period average is €96 million. Current issuance however remains above 12mo MA of €48.8 million.

A chart to illustrate:

01/07/2011: Retail Sales for May 2011

With a delay due to technical issues with the blog - here are the updated figures for retail sales for May:

• The volume of retail sales declined 2.1% in May 2011 when compared with May 2010 but rose 1.3%. mom. Current reading for the index is now 92.7, up from 91.5 in April but still below 2010 annual average of 93.3. The index is now above its 3mo average of 92.17. The index is now down 17.96% on its peak.
• Value fo retail sales is up 1.1% mom and down 1.5% year on year. The index reading in May 2011 was 88.4 against April reading of 87.4. May reading is still below 88.85 2010 average, but above 3-mo average of 88. Relative to the peak, value of sales is now down 24.44%.
  

• Ex-Motor Trades, the volume of retail sales decreased by 5.1% in May 2011 against May 2010 and declined 0.6% mom. The index now stands at 98.2 against 98.9 in April, and 99.1 3mo average. The index is also lower than 6mo average of 99.38. The latest yoy drop comes after 5.2% decrease in April 2011 and marks the second largest decline since December 2009 when index contracted 6.3% yoy
  
• Ex-Motors value index fell 1.2% mom and 3.5% yoy and now reads 95.2 against 96.3 in April. This was the largest annualized drop since September 2010 when yoy decline was 3.8%
  

Per CSO: "Motor Trades (+13.0%) and Electrical Goods (+2.9%) were the only categories that showed year-on-year increases in the volume of retail sales this month. Hardware Paints & Glass (-13.9%), Other Retail Sales (-10.3%) and Fuel (-9.9), were amongst the eleven categories that showed year-on-year decreases in the volume of retail sales this month." Interestingly, despite declines in volume, fuel sales were up 1.1% yoy in terms of value, implying rampant inflation in the category. In contrast, decline in value of sales in Furniture & Lighting (-14.5%) outpaced declines in volume of sales (-13.9%) implying deflation on top of collapsing volumes. In Electrical Goods, a rise in volume was offset by a 3.1 drop in value (yoy), implying deflation canceling out positive effects of growth in the volume of sales.

As of April 2011, Ireland (-4.9%) posted the second largest monthly drop in retail sales volumes in the Euro area after Malta (-8.0%), although Greece (likely to show deeper fall than Ireland) is yet to report comparative data. In March 2011 we recorded 5th highest drop in volumes, same as in February and January.