Only one-in-10 Irish consumers plan to spend more this Christmas than a year ago, according to the latest Credit Union consumer sentiment survey. Despite the easing of inflationary pressures consumers remain in a “watch, wait and worry” mode ahead of the Irish election and amid an increasingly uncertain geopolitical outlook, the report said.
The headline index for November was unchanged from the previous month at 74.1.
The adverse impact of an uncertain and increasingly unstable geopolitical backdrop was countered by the imperative of increased seasonal spending and stable if subdued readings on household finances, the report said.
“While it is not unusual for sentiment to show little change from month to month as this signals no major mood swing on the part of Irish consumer, only once previously in the near 29-year history of the sentiment survey has the index been completely unchanged between one month and the next,” the report’s author Austin Hughes said.
“We think the unfolding US election result, the upcoming general election in Ireland and an increasing uncertainty about what the future may hold could have prompted Irish consumers to hit a pause button in terms of their assessment of their economic and financial circumstances in November, leaving sentiment steady but subdued,” he said.
As part of the November survey respondents were asked a series of questions about their upcoming Christmas spending plans. Slightly fewer were found to planning spending cutbacks this Christmas (46 per cent versus 55 per cent last year) but caution still prevailed with just one-in-10 planning to spend more this year. Roughly half said they would finance their Christmas spend from their income while one in three will use savings.
The latest report also looked at US consumer sentiment, noting that while US consumers are more optimistic about the future than they were three years ago when inflation raged, “they are altogether more downbeat about their current circumstances, particularly their household finances”.
Comparing Irish and US consumer sentiment trends in recent years, it said “a greater degree of feel-bad factor becomes evident in US consumers assessment of their current circumstances”.
David Malone, chief executive 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.”
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