Irish consumer sentiment held steady in December, according to the latest Credit Union Consumer Sentiment Index, which reflects a mixed outlook among consumers as they head into 2024.
While concerns over the economic outlook and ongoing cost-of-living pressures persist, the survey revealed that consumers are slightly more optimistic about their personal finances in the coming year. As a result, there is an expectation of increased spending among Irish households in 2024.
Despite the steady sentiment in Ireland, the preliminary readings of consumer sentiment in the United States and the United Kingdom both showed improvements for December, suggesting a more positive outlook in these countries.
Austin Hughes, Economist and author of the report, explained that the mixed results in December’s sentiment index reflect opposing factors influencing the economic and financial circumstances of Irish consumers. While concerns about potential risks to the Irish economy, including shifts in US policies and a more fragmented global economy, remain, there are also indicators of strong activity and employment growth within Ireland.
“The mixed December index highlights the tensions between growing economic risks and recent positive data showing healthy gains in activity and employment,” said Hughes. “This has led to a cautious outlook for economic activity and jobs in the coming year.”
However, the survey’s findings revealed that with household incomes growing faster than inflation, Irish consumers are feeling somewhat more confident about their own financial situations. This optimism has translated into a slight uptick in consumer spending plans for 2024.
In addition to the standard survey questions, this month’s report included a special section inspired by Charles Dickens’ A Christmas Carol. The survey asked consumers to compare the current state of the Irish economy with its past, its standing relative to other economies, and its future prospects.
Hughes offered a lighthearted take, referencing the Dickensian comparison. “To butcher the opening line of A Christmas Carol, the Irish economy of our parents’ generations (like Marley) was dead to begin with,” he quipped. “On most ‘macro’ metrics, the Irish economy today is far healthier than it was twenty, thirty, or fifty years ago.”
While there remains caution regarding Ireland’s economic future, the sentiment index suggests that the country’s current economic health, along with increasing household incomes, is contributing to a more positive outlook for personal finances in 2024.
