Business

Consumer sentiment falls amid job losses and higher prices

Latest Credit Union consumer sentiment index drops to 67.8 in April, down from 69.5 the previous month

'The modest slippage in sentiment in recent months suggests things are not getting better as fast or as forcefully as many consumers had expected,' Austin Hughes says. Photograph: iStock

Eoin Burke-Kennedy
Thu Apr 25 2024 - 18:46

Irish consumer sentiment drifted lower for a third consecutive month in April as job worries and a spate of high-profile price increases weighed on the mood of consumers.

The latest Credit Union consumer sentiment index fell to 67.8 in April, down from 69.5 the previous month. The deterioration here was also more pronounced than in other countries.

“After a very difficult couple of years, a clear sense that conditions had stopped getting worse and worse prompted a significant improvement in Irish consumer confidence late last year but the modest slippage in sentiment in recent months suggests things are not getting better as fast or as forcefully as many consumers had expected,” the report’s author Austin Hughes said.

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“An easing in inflation and a still solid Irish economy mean consumers are not nearly as nervous as they were either six or 12 months ago. Importantly, while there is ongoing progress in these areas, the survey signals that recent changes in consumer circumstances are clearly insufficient to suggest a clear improvement in living standards is under way,” he said.

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The latest survey coincided with a report that restaurant closures could have led to nearly 1,600 job losses in February and several high-profile lay-off announcements at Citigroup, TikTok, Tara mines and Mediahuis. It also overlapped with higher excise duty on motor fuels as well as increased prices for broadband, mobile and TV services.

“Recent sentiment survey readings might suggest Irish consumers are grappling with the implications for them of an Irish jobs market that is still healthy but no longer white-hot, where lay-off risks have increased materially across a range of sectors and new job offers have become less plentiful,” Mr Hughes said.

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An additional questionnaire contained as part of the April survey found that some 23 per cent of Irish consumers say they cannot afford to go on holidays this year, modestly down from 27 per cent in 2023.

“The drop in those who say they can’t afford a holiday compared to last year might be interpreted as signalling some easing in cost-of-living pressures but the limited scale of improvement and the still substantial number of consumers unable to afford a holiday chimes with the message from the sentiment survey as a whole that progress is quite modest and problems still persist,” Mr Hughes said.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

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