Irish consumers remain in a “watch, wait and worry” mode ahead of Budget 2025, the latest consumer sentiment index suggests.
The Credit Union Consumer Sentiment Survey, compiled in partnership with Core Research, shows an index reading of 71.9 for the month, broadly unchanged from the 72 reading recorded in August. But the result indicates that the momentum evident in June and July has now faded, said economist Austin Hughes.
Irish consumers do not feel that things are getting notably worse, but there is little sense they believe things are clearly continuing to get better, Mr Hughes said.
“Increasing uncertainty about the global economic outlook, ongoing fallout from the cost-of-living crisis, further high-profile redundancy announcements and sharply divided views as to what the upcoming Budget could and should do mean that the average Irish consumer is now confronted with a confusing and concerning picture.”
This points to a “pivotal role” for the upcoming budget in framing the feelings and finances of Irish households in the months ahead.
Although Irish consumers’ assessment of the 12-month outlook for the economy improved marginally in September, they grew more worried about the prospects for employment.
The period in which the survey was conducted saw several high-profile redundancy announcements, including Intel announcing details of severance packages and the closure of an R&D facility in Limerick, Cardinal Health closing in Tullamore, and Wasdell, a pharma packaging company, closing in Dundalk.
“Encouragingly, Irish consumers assessments as to how their household finances had developed over the past 12 months improved fractionally in September. This likely owes something to some combination of an easing in energy costs of late, a further cut in European Central Bank interest rates in September and a continuing slowdown in inflation,” Mr Hughes said.
However, more Irish consumers are still of the view that their household financial circumstances have worsened over the past 12 months than believe they have improved.
“The steady if subdued sentiment reading for September hints that Budget 2025 could have a very important influence on Irish households in coming months,” said David Malone, chief executive of the Irish League of Credit Unions.
“The survey also highlights the widely varying financial circumstances across the spectrum of Irish consumers at present,” Mr Malone said.
Consumers were also asked what they thought should be the three main priorities for the Government in Budget 2025. Improving the health system was the most common answer, cited by 55 per cent, with addressing the shortfall in housing next, mentioned by 47 per cent. Both health and housing were more likely to be cited this year than in last year’s pre-budget survey.
Providing support to households to offset cost-of-living pressures was identified as a key priority by 42 per cent, compared to 40 per cent last year, which Mr Hughes said perhaps reflected “the cumulative strain of several years of elevated living costs”.
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