Institutional Sector Accounts Non-Financial Quarter 2 2024

The seasonally adjusted household saving rate in the second quarter of 2024 was 14.3%. This was an increase from 12.9% in the first quarter of 2024. As Table 1.1 above shows, this was because Total Disposable Income (TDI) rose by €847m, while Final Consumption Expenditure was up just €115m.

Households used their savings to add to their wealth in the form of real assets (mainly new homes) and financial assets (such as bank deposits). Unadjusted, saving (B.8g) was €7.8bn in the quarter and capital spending (P.5) was €4.9bn. Households also increased their assets in pension funds (D.8) by €1.3bn. Figures from the Central Bank of Ireland show that households deposited €2.0bn more than they withdrew from banks here. However, they also borrowed €1.0bn more in loans than they paid back. Households' financial assets also include life assurance funds and shares. Full accounts of assets and liabilities in financial instruments will be published by the Central Bank.

Household Income

The largest component of household income is Compensation of Employees (CoE). At current prices seasonally adjusted this was largely unchanged compared with the first quarter of the year (-0.1% change). Beneath this, there were significant movements at sectoral level. Figure 1.2 illustrates the differences by economic sector in the quarter compared to Q1 2024 after adjusting for seasonal factors. There was a significant rise in Public Administration (+€302m or +3%), while the Professional, Scientific & Technical sector saw a decrease in pay to workers (-€190m or -3%). Changes were smaller in other sectors. 

Comparing year-on-year, before price or seasonal adjustment, 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 deposits and pension fund holdings as interest rates have risen. The investment income received rose faster than investment income paid, which might be expected because household financial assets earning income are far greater than financial liabilities on which interest is paid.

Gross Disposable Income (B.6G) of households was €43.0bn in Q2 2024 before price and seasonal adjustment (that is, nominal unadjusted). Total Disposable Income (TDI, which also includes the adjustment for the change in pension entitlements (D.8)) was €44.1bn in the quarter, an increase of €2.3bn on Q2 2023. After accounting for inflation and seasonal factors, household revenue in real terms grew by just 1%. Figure 1.3 shows TDI before and after adjustments.

Consumption

Household consumption was €38bn in the second quarter of 2024, up from €36bn in the equivalent period last year, a rise of 6% in current prices seasonally adjusted. After taking out price rises consumption rose by 1% over the second quarter of 2023. Consumption of goods decreased while service purchases increased. In the consumer-facing sectors of the Services Index there was significant growth in Accommodation & Food Service (+7%). On the other hand, the Retail Sales Index volume was down slightly (-1%), with Furniture & Lighting showing the biggest decline (-7%). 

The difference between the price-adjusted and unadjusted increase in consumption is around 5%. The Consumer Price Index (CPI) rose by just 2.2% over the twelve months since June 2023, however, households experienced greater price rises, as the CPI does not include some expenditure by households such as purchases abroad. The CPI showed the divisions with the largest increases in the 12 months to June 2024 were Transport (+4.9%) and Restaurants & Hotels (+4.4%). There were declines in prices in Clothing & Footwear (-6.7%) and Furnishings, Household Equipment & Routine Household Maintenance (-1.1%).