Business

Consumer sentiment dips in March as cost of living still bites

Only one element of the survey – consumers’ outlook on jobs – saw an uptick in March

Economist and report author Austin Hughes said upward pressure on living costs may have eased but hasn’t yet reversed for consumers. Photograph: Julien Behal/PA Wire

Ellen O’Regan
Tue Mar 26 2024 - 01:00

Irish consumer sentiment dipped in March even as inflation slowed, amid an “extremely uncertain” economic outlook.

The latest Credit Union consumer sentiment survey, a monthly poll of 1,000 adults conducted in partnership with Core Research, came in at 69.5 in March, a slight fall from 70.2 in February, and down from 74.2 in January.

Consumer sentiment is up from the same month last year, as the index reading was 53.9 in March 2023. However, the survey notes that Irish consumer confidence remains subdued and below the long-term average index reading of 84.6.

Economist and report author Austin Hughes said that “while it may no longer be the worst of times, it is still far from the best of times”, as upward pressure on living costs may have eased but hasn’t yet reversed for consumers.

READ MORE

“Consumers are more focused on a continuing increase in the costs they face than in the fact that the pace of increase in prices is slowing,” he said.

Only one element of the survey – consumers’ outlook on jobs – saw an uptick in March to 64.7, from 61 in February.

Mr Hughes said this may be explained by the fact that March did not see the same spate of lay-off announcements as February, and that data released in the March survey period showed a drop in unemployment in February and job gains in late 2023.

The remaining elements of the survey – the general economic outlook, consumers’ personal financial situation 12 months ago and 12 months ahead, and plans for major purchases – all weakened between February and March.

The March survey also honed in on consumer home improvement spending, as 62 per cent of consumers surveyed had invested in their home in the past two years.

Some 37 per cent of consumers have spent on significant home improvements in the past two years, while a further 25 per cent have “refreshed” their home with spends on painting or decorating.

Savings were the most common source of funding for home improvements (45 per cent), followed by current income (23 per cent).

Just a quarter of consumers said they would borrow to finance home improvements – the majority of whom would use credit union loans, followed by bank loans and borrowing on credit cards or from family.

Mr Hughes said the survey results “may hint at a continuing caution on the part of Irish consumers about taking on debt”.

David Malone, chief executive of the Irish League of Credit Unions said it was “notable that consumers see their local credit union as the most important source of borrowing for home-improvement projects, with twice as many consumers saying they are funding improvements to their homes from credit unions as from banks”.

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.

LATEST STORIES