Irish consumer sentiment rose modestly in October, as consumers relaxed their nerves over jobs, cost-of-living pressures eased slightly, and the Budget introduced support measures.
The latest Credit Union Consumer Sentiment Survey, compiled by Austin Hughes in partnership with Core Research, showed an index reading of 74.1 for October.
This was a modest improvement on September’s reading of 71.9, but it still fell well below the long-term survey average of 84.3.
The index found that, despite the lift, Irish consumers are still guarded in their thinking about their own financial circumstances against the broader economic backdrop.
Irish sentiment was more positive than that in the US, where consumers are waiting to judge the long-term economic outlook until after the presidential election on 5 November.
All five elements of Irish sentiment improved in October – a trend only seen once in the past nine months.
Budget25
Despite media commentary about the economic risk of the ‘giveaway’ budget – announced on 1 October – there was little change in consumer expectations for the 12-month outlook for the Irish economy between September and October.
Consumers rated the Budget lowest on areas relating to housing and health – two areas of key concern in the September index.
In addition to this, consumers rated the stability of public finances in the wake of the Budget second highest in the survey, in spite of media criticism.
Just under half of consumers surveyed (46%) said that they expected an improvement to their standard of living in the wake of the Budget, with 42% expecting a slight improvement, and just 4% expecting a significant improvement.
Some 47% of respondents said that they did not expect an improvement to their standard of living at all.
Notably, those living outside of Dublin said that they were less likely to feel the benefits of the Budget, perhaps due to being outside of the expensive city.
Similarly, women were less likely than men to report any benefit, possibly due to income differences.
Those reporting difficulty to make ends meet found the Budget less beneficial to their standard of living, while older consumers stated that they did not expect it to help dramatically.
‘Solid Irish Economy’
Tax and welfare changes in the Budget, while materially improved, have changed in line with indexation, thus providing more of a status-quo update than an improvement.
Approximately €2 billion of the €4.7 billion in the Budget was assigned to temporary cost-of-living reliefs, meaning that consumers are not looking at them to help in the long term.
The survey further found that the Budget did not offset ongoing pressures in consumers’ personal finances.
David Malone, chief executive officer of the Irish League of Credit Unions, said on the results, “The small uptick in Irish consumer confidence in October is encouraging, in that it appears to reflect a solid Irish economy and some small easing in cost-of-living pressures.
“As we head towards the turn of the year, the survey serves to emphasise both the opportunities and challenges that Irish consumers now face – circumstances that they can face more confidently with the support of their local credit union.”
Read More: Irish Consumer Sentiment Unchanged In September As Budget Looms
