Irish consumers’ attitude towards the economy is becoming more optimistic, reaching its highest level in over a year. This can be attributed to the Easter break and the anniversary of the Good Friday Agreement, which provided a reprieve from the usual economic and financial news. The Credit Union Consumer Sentiment Index rose to 59.7 in April, a 5.4-point jump from the previous month. This indicates that the modest recovery in consumer sentiment that began last year is still holding firm.
Many people still have to contend with considerable uncertainty and financial stress, however this didn’t stop all five areas of the index from experiencing gains in April, notably the outlook for employment. This could be linked to the resilience of the Irish job market, which has remained close to full employment even with the tech sector job cuts.
The three areas related to personal finances also revealed positive results, likely due to the drop in energy prices, the possibility of borrowing costs staying low, and the steady, albeit slight, increase in house prices.
The global cost-of-living crisis has been one of the worst ever and commenced with the Russian invasion of Ukraine. In response, governments and central banks have taken action to try to contain the double-digit inflation rate seen in the latter part of 2022. Measures such as business supports and energy credits were implemented to ease the burden on people.
At 59.7, the sentiment index is still far from the 27-year average of 85.3, meaning the recovery in consumer confidence has a long way to go. Although it appears the public are now looking at the glass as half full rather than half empty, it doesn’t seem like this will translate into an excessive surge in spending.
