Consumers in the Republic were able to look on the bright side in December amid a “tentative” easing of cost pressures but households remain anxious about price inflation and winter energy bills, new research from the Irish League of Credit Unions has indicated.

The index, based on a survey of more than 1,000 adults, rose marginally from 61.9 in November to 62.4 this month, suggesting a marginal improvement in sentiment over four weeks or so.

The index has risen from a dismal 48.6 in December 2022, the first year-on-year improvement in end-of-year sentiment since 2017, indicating a sharp improvement in consumer outlook since last winter.

The upward trajectory over the past 12 months “may hint that [consumers] feel 2024 could be a year where things feel slightly better”, said economist and report author Austin Hughes.

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“Overall, Irish consumers remain concerned about their financial circumstances and cautious in their thinking about the year ahead, but they are notably less negative and fearful than they were twelve months ago,” said Mr Hughes. “In broad terms, the December 2023 reading might be described as signalling an easing in Christmas fear rather than overwhelming Christmas cheer.”

Renewed concerns about a slowdown in the multinational sector coupled with analysis suggesting the Irish economy could shrink this year in GDP (gross domestic product) may have weighed on the consumer’s mood in recent months, Mr Hughes said.

Still, he said the survey indicated that while households are concerned about macro issues like unemployment, which has risen somewhat in recent months, there has been some improvement in their outlook regarding their own personal finances.

“Our sense is that the improvement in the household finances elements of the consumer sentiment survey largely reflects some encouraging developments regarding cost-of-living pressures,” Mr Hughes said. “European Commission data suggest that Irish retail prices for motor fuel and heating oil have continued to edge lower of late while several electricity and gas providers announced further cuts in their tariffs.

“At the same time, November inflation data showed not just a sharp drop in inflation, but a month-on-month fall in Irish consumer prices. The fall was principally but not entirely driven by lower energy costs.”

This stands in stark contrast to last December when energy prices were on “a worrying” upward trajectory, he said.

Meanwhile, an overwhelming 76 per cent of survey respondents said they see the cost-of-living as the key economic issue to be addressed in the new year, followed by housing.

However, while a majority of consumers also said they expect to see little improvement on either issue over the next 12 months, most expect to see progress on other, secondary issues like improved social welfare rates and reductions in their tax burden.

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