The early estimate of the Household Saving Rate for Quarter 1 (Q1) 2024 shows it increasing to 14.7% in the first three months of the year. This equates to €8.1bn, before adjusting for seasonality or inflation.
Income and consumption both rose in the first quarter of 2024.
Households' incomes rose more than their consumption, leading to a rise in savings. Unadjusted, total disposable income of households was €42bn, compared to €38bn in the first quarter of 2023.
Household consumption was €34bn in Q1 2024, up from €32bn in the equivalent period last year.
These estimates are subject to revision as data from the Annual National Accounts becomes available in the next few weeks.
The figures published today are provisional, and final figures for household income, expenditure and saving will be published as part of the Q1 2024 Final Institutional Sector Accounts to be issued later in the summer. This year, 2024, is a Benchmark revision year for National Accounts purposes across EU Member States. This means that as well as routine revisions to incorporate new data such as that on self-employed earnings (gross mixed income), there will also be revisions that are undertaken every five years in line with European peers. For example, for Ireland this will include revised data due to incorporation of the 2022 Census of Population data, and a new Household Budget Survey. Benchmark revisions for Ireland will be incorporated in the Annual and Quarterly National Accounts and hence into the Sector Accounts. Because this new data will affect the estimate of household saving, today's release is a provisional Q1 2024 estimate.
Household consumption was €34bn in the first quarter of 2024, up from €32bn in the equivalent period last year. Prices at the end of Quarter 1 (March) rose by 2.9% between March 2023 and March 2024. The Consumer Price Index showed the divisions with the largest increases in the 12 months to March 2024 were Recreation & Culture (+8.3%) and Restaurants & Hotels (+5.5%)
After taking out price rises, and adjusting for seasonal factors, consumption rose by 0.6% over the previous quarter. The Retail Sales Index volume was up 2.7% overall, with Textiles, Clothing & Footwear showing the greatest volume growth. In the consumer-facing sectors of the Services Index there was significant growth in Transport & Storage and Other Service Activities (such as gambling and hairdressing).
Total Disposable Income (TDI) of households rose by 3.0% in the first quarter of 2024. This is even after adjustment for inflation and seasonal factors. Before adjustments, total household income in the quarter was €42bn, more than double its level of twenty years ago.
Compensation of Employees (CoE) at current prices seasonally adjusted rose by 4.7% compared to Q4 2023. This increase was due to higher average earnings more than to higher numbers in work. The Earnings, Hours and Labour Costs Survey showed seasonally adjusted average weekly earnings up 2%, while the Labour Force Survey showed numbers employed were up 0.3% in the quarter. Figure 3 illustrates the changes by economic sector in the quarter after adjusting for seasonal factors. All economic activity sectors except Agriculture, Forestry & Fishing paid more to their workers in the quarter. The most significant rise was in Public Administration, which grew by €331m (3.4%).
As well as wages, TDI also includes other income such as self-employed earnings, interest and dividends received and social benefits (such as Child Benefit), but is after deduction of income taxes, social contributions (such as PRSI) and interest paid. More detail will be published in the Institutional Sector Accounts next month.
| sector | Change (Seasonally Adjusted) since Q4-2023 |
|---|---|
| Agriculture, Forestry and Fishing | -3.69648510091105 |
| Industry (excl. Construction) | 185.658925647404 |
| Construction | 45.9920680893042 |
| Distribution, Transport, Hotels and Restaurants | 346.364940712926 |
| Information and Communication | 254.764999007012 |
| Financial and Insurance Activities | 119.575484911546 |
| Real Estate Activities | 21.0405662294304 |
| Professional, Admin and Support Services | 252.691186294029 |
| Public Admin, Education and Health | 330.510958465849 |
| Arts, Entertainment and Other Services | 40.9371519221978 |
Household saving rose from 13.1% in Q4 2023 to 14.7% in Q1 2024 (current price seasonally adjusted). As Figure 4 shows, the rate hit a local minimum at the end of 2022, and has been generally stable or increasing since then.
Household saving is added to wealth either as real assets (such as new homes), or financial assets (such as deposits), or as paying off liabilities (such as mortgage debt). In Q1 2024, before adjusting for seasonality or inflation, households saved €8.1bn. The first quarter of the year tends to have high saving, as consumption is lower after Christmas and bonuses are paid.
Investment in dwellings and improvements (most of which is by households) was €2.7bn. Additions to pension funds (D.8) were €1.1bn. Figures from the Central Bank of Ireland show that households' deposits in banks in Ireland rose by €1.9bn. Loan liabilities of households to banks were up €0.1bn in the three months (a small change on a stock of €102bn), meaning households funded their current and capital expenditure through more borrowing as well as from deposits. Thus, it is unclear at this stage how the other €2.5bn of the €8.1bn preliminary saving estimate was added to wealth. A detailed quarterly breakdown of changes in financial assets and liabilities will be published by the Central Bank and a revised saving estimate from the non-financial accounts will be published in the coming weeks.
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Statistician's Comment
The Central Statistics Office (CSO) has today (13 June 2024) released Household Saving Quarter 1 (Q1) 2024.
Commenting on the results, Peter Culhane, Statistician in the National Accounts Analysis & Globalisation Division, said: "Preliminary estimates for the first quarter of the year suggest household saving rose to 14.7% as the proportion of income not immediately consumed but added to wealth increased. In Q1 2024, before adjusting for seasonality or inflation, households saved €8.1bn. The first quarter of the year tends to have high saving, as consumption is lower after Christmas and bonuses are often paid in this quarter. The Annual National Accounts and the Institutional Sector Accounts published in the coming weeks will provide new data and additional detail on the household economic sector."