In March, Irish consumer sentiment experienced a slight decline despite a slowdown in inflation, reflecting a highly unpredictable economic landscape. The Credit Union’s monthly consumer sentiment survey, which engages with 1,000 adults in association with Core Research, reported a score of 69.5, down from 70.2 in February and 74.2 in January.
Compared to the same time last year, consumer sentiment has risen from an index score of 53.9. Nevertheless, according to the survey, the confidence of Irish consumers remains reserved, lagging behind the long-term average index of 84.6.
Austin Hughes, an Economist and author of the report, commented that while the situation might not be as bad as it once was, it still isn’t great. He noted that the easing burden of living costs has not yet reversed for consumers, who are more concerned with ongoing increases in their costs than the decelerating pace of price hikes.
Only one survey aspect, consumers’ job outlook, registered an improvement in March, rising to 64.7 from 61 in February. Hughes attributed this to the absence of widespread redundancies in March compared to February. Additionally, data unveiled during the March survey period showed falling unemployment in February coupled with job growth late in 2023.
The remaining survey aspects, including the overall economic outlook, financial circumstances of consumers a year ago and ahead, and big purchase plans, all suffered a setback between February and March.
The March report also scrutinised consumer spending on home renovations, revealing that 62% of those surveyed had funnelled investment into their home over the past two years. Significant home improvements accounted for 37% consumer spending, with another 25% used on “refreshing” the home through activities such as painting and decorating.
Funds for these home renovations came mostly from savings (45%), followed by current income (23%). Only a quarter of consumers stated that they would resort to borrowing for home renovations, mostly via credit union loans, with bank loans, credit card borrowing or family lending as secondary options.
Mr. Hughes suggested that the poll results could indicate a persistent wary attitude among Irish customers towards accruing debt. According to David Malone, the CEO of the Irish League of Credit Unions, it’s significant to note that consumers view their neighbourhood credit union as the paramount source of loans for housing enhancement projects. He pointed out that twice the number of consumers stated they were sourcing funds for home renovations from credit unions as opposed to banks.