The latest report from the Irish League of Credit Unions reveals a modest uptick in consumer sentiment for the month of December, offering a glimmer of positivity amid persistent economic uncertainties. The survey, which garnered a reading of 62.4, shows a slight improvement from November’s figure of 61.9 and a significant boost from the December 2022 reading of 48.7. While this continues the upward trajectory in consumer sentiment that took root in late 2022, it is important to note that the current reading remains notably below the survey’s 28-year average of 84.7.
Consumers reported a more optimistic evaluation of their current conditions compared to the previous month. Additionally, respondents expressed an improved outlook on their personal financial situations in comparison to the same period last year, along with a positive perspective on their financial prospects in the upcoming year. This positive sentiment extended to an increased inclination towards making major purchases, indicating a potential boost in consumer spending compared to the prior month.
Despite these encouraging signs, the survey highlighted that a degree of anxiety persists among consumers, as their expectations weakened slightly on a month-on-month basis. Respondents exhibited a subtle increase in pessimism regarding the broader economic outlook and concerns about unemployment.
Looking ahead to 2024, consumers expressed specific areas where they hope to witness improvements. Notably, 76% cited the cost of living as a key focus for enhancement, highlighting the widespread impact of rising prices on household budgets. Healthcare also emerged as a priority, with 43% of respondents expressing a desire for improvements in this sector. Additionally, 38% voiced the need for enhancements in housing supply, reflecting ongoing challenges in the housing market.
However, when asked about areas where improvement is least expected, the cost of living once again took the lead, with 43% of respondents expressing skepticism about positive changes in this area. Two-fifths of consumers did not anticipate progress in housing supply, while more than a third did not foresee significant improvements in healthcare.
Economist Austin Hughes, commenting on the survey findings, acknowledged the incremental positive shift but emphasized that consumers continue to grapple with various pressures. Hughes pointed to positive factors contributing to this shift, such as the decline in energy costs, the potential for lower interest rates in the coming year, and indications that inflation may ease in the coming months, providing consumers with greater spending power.
Describing the current sentiment as an “easing of Christmas fear” rather than a pronounced sense of holiday cheer, Hughes highlighted the challenges consumers have faced over the past couple of years. Despite the easing of inflation, he noted that consumers remain cautious due to the recurrent occurrence of unexpected shocks that have placed them in precarious economic situations. XZ, XZ, XZ, XZ, XZ, XZ, XZ, XZ