Consumer sentiment falls in March amid ongoing caution

March 27, 2024

Consumer sentiment dropped again this month, new research has found, amid ongoing caution and concern.

The Credit Union Consumer Sentiment Index found rising living costs and another increase in fuel prices are weighing on spending plans.

Sentiment fell to 69.5 in March, from 70.2 in February, which in turn was lower than January.

The report’s author, Austin Hughes, said the broad message of the survey is that while it may no longer be the worst of times, it is still far from the best of times.

“Upward pressure on living costs may have eased but hasn’t reversed and the economic outlook remains extremely uncertain,” he said.

“The gradual if uneven fading of negative factors on consumer confidence is not translating into the emergence of strong positive developments in terms of the economic and financial conditions now being experienced by Irish consumers.”

Mr Hughes said the “holding pattern” sense in March was mirrored in other countries, including the US, the eurozone and the UK.

“A common ingredient in sentiment indicators globally at present appears to be an element of relief that energy-led price pressures are easing but this is offset by continuing strains on spending power and ongoing concerns about the economic outlook,” he said.

“As a result, a widely seen improvement in consumer confidence measures at the start of the year appears to have stalled as consumers wait for clearer evidence that a sustainable improvement in their circumstances is at hand.”

Four out of five elements of the survey weakened in the month, with the outlook for jobs the only one to buck the trend.

The largest monthly decline came in consumer thinking on the way their own financial circumstances had evolved over the past year.

The survey also asked special questions this month around home improvements and found two out of three Irish consumers undertook some form of spending on home improvements in the past two years.

37% say they undertook significant work compared to 25% who say their focus was on ‘refreshing’ their home by painting and decorating.

Spend on home improvements was positively correlated with income and negatively correlated with difficulty in making ends meet.

Male respondents were also more likely to say they had undertaken significant home improvement spend than females.

However, 30% of Irish consumers say they didn’t undertake any home improvement spend in the past two years.

45% of respondents are undertaking home improvements using their savings, while one in four say they will finance their home improvement spend from their current incomes.

Article Source – Consumer sentiment falls in March amid ongoing caution – RTE

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