Despite positive forecasts for the Irish economy, the latest RED C Consumer Mood survey shows that consumers remain cautious, writes Geoff Tucker.
Despite a continued improvement in the consumer mood, the cost of living crisis still weighs heavily on peoples’ minds
While we see a continued improvement in the consumer mood, many remain concerned about the outlook for the economy, with the cost of living crisis still weighing heavily on peoples’ minds. Consequently, consumers remain cautious on their plans for spending.
Almost one-in-five (18%) consumers expect the Irish economy to improve in the next six months, up from just one-in-twenty (5%) 12 months ago. But while some are that bit more optimistic about the future for the economy, more than half (52%) believe things will actually get worse over the next six months (this is down from more than four-in-five 12 months ago).
Clearly concerns over the rising cost-of-living continue to preoccupy the consumer mindset. Despite the moderation in inflation over the past year, four-out-of-five (80%) are expecting a further deterioration in the cost-of-living in the next six months. On top of this, consumers are also expecting further increases in the cost of borrowing and no improvement in affordability in the residential property market.
Despite this somewhat downbeat assessment of the prospects for the economy and cost-of-living, consumers are increasingly optimistic about the outlook for the jobs market. Even in the context of recent high-profile job losses in the technology and business services sectors, this no doubt reflects the sustained low level of unemployment and continued growth in employment observed over the last year.
In areas such as entertainment, consumer goods and services, and holidays / short breaks, the proportion of consumers that expect to spend less in the coming six months is more than double the proportion that plan to spend more, indicating a contraction in spending in these areas. Consumers are most likely being thriftier and making carefully considered choices as to how they spend their money.
Geoff Tucker is associated director of RED C