This release was updated on 20 April 2023. After the first publication (6 April), data from Government Accounts was significantly revised following dialogue with Eurostat. The largest single item to be changed was capital grants. The EU agency advised that the recording of the Defective Concrete Blocks Grant Scheme should be revised from upfront expenditure in 2022 and instead accrued at the time of approvals. This approach is consistent with other Member States. This affected capital transfers (D.9) paid by government (S.13), which were revised downward for 2022-Q2 from €3,140m to €428m (a revision of €2,711m). Other smaller changes to S.13 data were also incorporated and other sectors adjusted accordingly. Please see the Information Note for further details. We apologise for any inconvenience caused.
| 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 | |
| 2022Q3 | 36,840 | 28,944 | 21.43% |
| 2022Q4 | 38,122 | 29,596 | 22.36% |
The household saving rate in the last quarter of 2022 was 22%. The final quarter saw an increase in the rate over the third quarter of the year. Both income and expenditure increased in the last quarter, and saving is the difference between income and consumption. The saving rate is the saving divided by the income. Income grew faster than expenditure and this caused the higher level of the saving rate. This rate is seasonally adjusted, that is, it removes the usual patterns that occur every year, like Christmas spending and end-of-year tax payments. Saving in Table 1.1 is given in current prices, that is, not adjusting for inflation.
Households saving is added to wealth either as more assets or fewer liabilities. Assets can be real physical assets (like homes) or financial assets (like bank deposits). Household financial liabilities are mainly loans, like credit card debt and mortgage principal owed. Investment in non-financial assets (P.5) such as dwellings went from €2.1bn in the last quarter of 2021 to €2.6bn in quarter 4 of 2022. Saving was also used to increase deposits in banks and credit unions, to pay off debt and to put money aside for pensions and life assurance. Changes in financial assets and liabilities are shown in the Quarterly Financial Account.
The preliminary estimate for the four quarters of 2022 shows a saving rate of 21%, down from 24% in 2021. As in the last quarter, income and expenditure both increased. However, spending grew more significantly in 2022, due to price inflation and a lifting of pandemic restrictions.
| Saving ratio | |
| 2019Q1 | 9.56% |
| 2019Q2 | 9.66% |
| 2019Q3 | 10.72% |
| 2019Q4 | 13.11% |
| 2020Q1 | 21.16% |
| 2020Q2 | 33.04% |
| 2020Q3 | 20.82% |
| 2020Q4 | 25.51% |
| 2021Q1 | 31.86% |
| 2021Q2 | 22.62% |
| 2021Q3 | 21.93% |
| 2021Q4 | 20.65% |
| 2022Q1 | 20.43% |
| 2022Q2 | 20.92% |
| 2022Q3 | 21.43% |
| 2022Q4 | 22.36% |
Seasonally adjusted pay to workers at current prices increased by 1.6% this quarter compared to the third quarter of 2022. The largest increase in growth quarter-on-quarter can be seen in Public Administration, Education & Health. Figure 1.2 illustrates the changes by economic sector in the quarter after adjusting for seasonal factors. Higher compensation of employees was owing to a combination of higher average weekly pay (seasonally adjusted) and more people in work.
The European Central Bank, as well as other central banks, raised interest rates several times in 2022 from a very low base and this has improved the return on all financial assets, including the half a trillion (€495bn) held by Irish households. Investment income (D.4) increased significantly compared to the same quarter in 2021: €2.9bn compared to €1.7bn in the last three months of the previous year. Investment income includes the return on capital in pension funds and life assurance which belongs to the household but which is locked into a fund. Thus, this is attributed to the household sector but the owners do not have immediate access to it.
Total Disposable Income is adjusted for payments that households have to make, such as income tax (D5) and social insurance (P61) such as PRSI. Taken together, tax and social contributions were €2bn higher than in the equivalent period of 2021. These payments are generally a fixed proportion of income and so grow with them. Social contributions also include the notional reinvestment by households of the income earned by their pension funds and life assurance policies back into the fund. Hence, this investment income is part of the increase in social contributions which is paid by households, but which individual households do not directly observe.
For 2022 as a whole the picture was similar to Q4. Total Disposable Income was higher due to growth in earnings from employment and from investments. Income from social benefits (D.61, such as the Pandemic Unemployment Payment) was significantly lower than in 2021, while social contributions (D.61) increased in line with income from work and from financial assets.
| sector | Change (Seasonally Adjusted) since Q3-2022 €m |
|---|---|
| Agriculture, Forestry and Fishing | 3.26372699932026 |
| Industry (excl. Construction) | 29.8420581625505 |
| Construction | 4.10546088272008 |
| Distribution, Transport, Hotels and Restaurants | -43.5077149602739 |
| Information and Communication | 65.6443036380192 |
| Financial and Insurance Activities | 15.3598264037209 |
| Real Estate Activities | 0.224508202424715 |
| Professional, Admin and Support Services | 38.4564338497676 |
| Public Admin, Education and Health | 365.241245077412 |
| Arts, Entertainment and Other Services | 13.5749103734491 |
Household consumer spending (P3) increased in the last quarter of the year from €28.6bn to €31.7bn (+€3.1bn). When we seasonally adjust for factors like Christmas, the increase was a more modest €0.7bn. When we then also take into account the fact that consumer prices increased by 1.8% between September and December, the real increase was €0.3bn.
The Retail Sales Index shows highest volume increases in Textiles, Clothing & Footwear and Books, Newspapers & Stationery. There was also a significant increase in sales in Bars. The Services Index showed growth in Food Service (restaurants) as well as Other Services.
Consumer spending rose €14bn in 2022 to €114bn. The rise was partly due to the same quantity of goods and services costing more than they did the previous year: the Consumer Price Index (CPI) rose by 8.2% between December 2021 and December 2022. It was also due to higher volumes of goods and services sold. The Retail Sales Index for the year showed a 78% volume increase in sales in Bars as well as volume growth in Department Stores, Furniture & Lighting, and Textiles, Clothing & Footwear.
Table 1.3 is new in this release. It shows a full sequence of accounts for Households and NPISH. The balancing item at the end of each account is shown as a use (paid), and this is then the opening resource (received) of the next account. It is intended to assist readers in understanding the sequence and how the balancing items are calculated. Similar tables for other sectors are shown in Tables 2.2, 2.5, 2.8, 3.2 and 3.5. Any feedback on this or any other element of the publication is welcome.
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.
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