Irish consumer sentiment rose marginally in August despite the uncertain economic outlook and the continuing cost-of-living squeeze.
The latest credit unions consumer sentiment index rose to 63.2 in August, up from 61.6 in July, a shift that was described as “statistically insignificant”.
Nonetheless, it was enough to lift the barometer to its highest level since February, before the Iran war triggered a spike in energy prices.
“However, the general tone of the August sentiment survey still suggests that Irish consumers are nervous about the general economic outlook and negative about their own financial circumstances,” economist and author of the sentiment report Austin Hughes said.
READ MORE
“The August survey period was notable for comparatively few notable economic developments and, with weather remaining exceptionally good, it may be that many consumers took something of a short ‘holiday break’ from what continue to be serious economic and financial concerns,” Hughes said.
The change here coincided with improvements in consumer sentiment in both the euro area and the UK.
Will the upcoming budget drive inflation and increase costs for Irish households?
However, there was a significant weakening in sentiment in the US linked to worries about the outlook for activity and inflation.
Consumer sentiment here has shifted up and down in recent months as Irish consumers struggle to assess the impact of geopolitical uncertainty on their economic and financial circumstances.
The latest reading continues to lie some considerable distance below the long-term survey average of 83.1 or the most recent 10-year average of 76.1, suggesting consumers here “remain nervous about the economic climate and negative about their own household finances”, the report said.
All five components of the latest Irish survey, which was compiled in partnership with Core Research, showed improvements compared with July, with the largest month-on-month gain relating to the general economic outlook.
However, the report noted that there were relatively few domestic economic releases of note through the August survey period.
“This dearth of developments coupled with normal vacation time may mean that many Irish consumers enjoyed a ‘holiday break’ from the normal routine of reports highlighting downside risks to the economy and household living standards,” it said.
Responding to the August survey results, David Malone, the chief executive of the Irish League of Credit Unions, said: “The slight uptick in consumer sentiment is welcome but the general tone of the August survey highlights the financial challenges facing many Irish households at present.”
