Irish consumer sentiment remained unchanged in November as increased social spending and stable readings of household finances were countered by uncertain geopolitical terrain.
The Credit Union Consumer Sentiment Survey, compiled by Austin Hughes in partnership with Core Research, shows an index reading of 71.4 for November, identical to October’s reading.
While it is not unusual for consumer sentiment to stay largely the same, this is only the second time in the survey’s near 29-year history that the reading has remained unchanged one month to the next.
The figure stayed well below the long-term survey average of 84.3 as conflicting forces kept consumers in “watch, wait and worry” mode.
Hughes notes in the report that the unfolding US election result, Ireland’s upcoming general election and uncertainty about the future “could have prompted Irish consumers to hit the pause button in terms of their assessment of their economic and financial circumstances in November.”
Authors in the US surveyed consumers before the election and found a slight lift in sentiment compared to October.
Authors of the US survey attributed the improvement to a stronger responses from self-reported Republican voters offsetting weaker responses from self-reported Democratic voters.
Egg Prices
The cost of living has been a key factor in consumer sentiment both sides of the Atlantic the past few years, and the issue of food inflation is best illustrated by the average cost of eggs.
Hughes reports, “After a decade of virtually unchanged prices, the average cost of a dozen eggs in the US rose from $1.82 in October 2021 to $4.82 in January 2023.”
He adds that though the price of eggs has fallen somewhat since then, it currently represents a cumulative increase of 82% over the past three years.
According to the Central Statistics Office (CSO), the average cost of eggs in Ireland rose by 25.8% in the same period.
In the EU, the price of eggs rose on average by 28.9% while in the UK the increase was 45.6%.
Hughes points out that changes such as this “tend to exert an outsized impact on consumer thinking as to how severe the cost-of-living pressures they face may be.”
Despite this, consumer sentiment in the UK rose unexpectedly, driven by Black Friday deals and a less-negative-than-anticipated response to Labour’s budget.
Black Friday And Christmas
In Ireland, Black Friday and the build-up to Christmas boosted consumer buying plans, with even cost-conscious customers aware of significant easing in cost inflation.
The survey found that fewer Irish consumers are planning to cut back on their Christmas spend in 2024 than either of the past two years as inflation eases, though some spending anxiety remains.
Consumers outside of Dublin, those aged between 45 and 54 and women were more likely to say they are cutting back on spending than others.
When asked how they would fund their Christmas spending, half said they would use their income while a third said they would draw on savings.
Nearly one in ten said they did not know how they would fund seasonal expenses, while 6% said they would be relying on support from family and friends.
Those struggling to make ends meet are four times more likely to say they do not know how they will fund the Christmas season, and surprisingly, the age group most likely to not know how they will fund the holiday is the 45 to 54 group.
‘Spending Plans Improving’
Speaking about the overall findings, David Malone, CEO of the Irish League of Credit Unions said, “It is encouraging that the November sentiment survey suggests consumer spending plans are improving and while most Irish households will again be careful in their Christmas outlays, cutbacks are not quite as prevalent as in recent years.
“For assistance with their financial needs, big and small, at Christmas and throughout the year, Irish consumers can rely on their local credit union.”
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