A bleak picture
FISCAL AUSTERITY, financial uncertainty and job insecurity test and challenge the will and resilience of people. They serve to erode self-confidence and to weaken a sense of hope and optimism about the future.
The latest survey of consumer spending in 2011 by the Irish League of Credit Unions (ILCU) measures aspects of the cost of the economic downturn, as it affects individuals and households. And it records their response to the tough challenges that many face where a majority of consumers now struggle to pay their bills. The survey results paint a bleak picture. And with little prospect of an imminent improvement in the economic outlook, consumers, not surprisingly, are pessimistic about the future.
As disposable incomes continue to decline, the cost of health insurance, fuel and energy has risen inexorably, while public expectations of any improvement in 2012 have diminished. Over four fifths of those interviewed in this national survey expect this year to be more difficult than 2011. The survey was conducted in the aftermath of the budget and set against the background of continuing currency turmoil and uncertainty in the euro zone. Further confirmation of the prevailing mood of public pessimism came yesterday with the KBC Bank/ESRI index which recorded a sharp decline in consumer confidence, the biggest monthly fall in more than 10 years.
Economic statistics present a grim, but abstract, picture of the impact of the downturn. This survey, which examines how consumers’ attitudes and spending patterns change over time adds a necessary human dimension to those macroeconomic indicators. The data offer an insight into the real financial hardship that many encounter in their daily lives, and record how consumers are coping with financial adversity. The severity of the economic downturn affects the quality of life of many consumers who struggle to pay utility bills and to meet mortgage or rent payments out of declining real incomes. Only one in three say they can afford to save, while one in four consumers were “very worried about how they are going to manage”.
The report makes for bleak reading but by clearly pinpointing the financial problems that consumers face, the Irish League of Credit Unions has performed a useful public service. The advice from its chief executive, Kieron Brennan, to those who find themselves in financial difficulty to contact their bank or credit union to discuss their situation, is worthwhile, and should be heeded.