Consumer sentiment improves but anxiety remains

Consumer sentiment improved slightly in December and was significantly higher year-on-year, according to the latest report by the Irish League of Credit Unions.

The latest survey had a reading of 62.4, compared to 61.9 in November and 48.7 in December 2022.

It represents a continuation of the broadly upward trend in consumer sentiment that began in late 2022, though the reading remains well below the survey’s 28-year average of 84.7.

It came as consumers gave a more positive assessment of their current conditions compared to last month.

People were also feeling better about their personal financial situation compared to 12 months ago, and the outlook for their finances in the year ahead.

Meanwhile they were more inclined towards making major purchases than was the case a month ago.

However the survey also showed that anxiety remains, with consumer expectations slightly weaker month-on-month.

People were also slightly more pessimistic about the outlook for the wider economy, and for unemployment.

When asked about what areas they would like to see an improvement in during 2024, 76% of consumers cited the cost of living, while 43% said healthcare. Meanwhile 38% said they wanted to see an improvement in the housing supply.

However when asked where they least expected to see an improvement, the cost of living was also the top answer – cited by 43% of people.

Two fifths of consumers did not expect progress around housing supply, while more than a third of consumers did not expect progress around healthcare.

Commenting on today’s survey, economist Austin Hughes said it marks a small step in the right direction, but consumers are still facing a lot of pressures.

Austin Hughes said that consumers are seeing things move in a slightly positive direction – including the drop in energy costs, the possibility of lower interest rates next year and suggestions that inflation will be a good deal lower over the coming months so their spending power will go further.

“We describe it in our analysis as an easing of Christmas fear rather than an overwhelming signs of Christmas cheer”, he stated.

As consumers have faced so many shocks over the last couple of years, he said it is understandable that they are not going to be jumping up and down despite seeing inflation begin to ease because so often a new and completely unexpected shock has put them into more dangerous waters.

Article Source – Consumer sentiment improves but anxiety remains – RTE

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