This week the Visa Consumer Spending Index for April was released. On the 8th May, the Index was launched and it revealed that there has been a sharper slowdown in spending during the month of April. The data was compiled by Markit and the Spending Index is separate from Visa’s business performance. The results from the spending Index reflects overall consumer spending and not just the transactions that occur on cards.
The research has shown that in April the consumer spending has risen at the slowest pace for three month at +0.5% year-on-year. However, data has also been released which shows that there has been a renewal in the increase of face-to-face spending, which is up by +0.3%. This boost on face-to-face spending is contrasted by a slight dip which has occurred in ecommerce of -0.1%. The Markit research has also found that the Food and Drink sectors have been experiencing the best growth in three years, with an increase of +5.9%. Clothing and Footwear have also seen their firs expenditure increase in five months of +2.3%.
The UK household spending has only seen a slight increase over April which is indicating a further slowing down in the growth momentum. There was a +0.5% year on year increase found at the start of the second quarter, which is down from the +1.0% result in March 2017. The April result is also the weakest result since the beginning of the year and was below the average growth for the whole of the first quarter, which was +0.9%.
The weakest performing sector in terms of spending was the Health and Education, which saw a decrease of 9.5%. The Transport & Communication sector also had a reduction in the amount of spending in April of 9.2%. The only other broad sector to experience a drop in expenditure of 3.4%.