Irish consumer sentiment has continued to decline amid worry over a global recession in the future, new research has found.
According to the latest KBC consumer confidence survey, Irish consumer sentiment has declined for the fourth month in a row.
In May, consumer confidence dropped to 55.2 from 57.7 in April, which is the smallest decline recorded in the last four months.
Austin Hughes, chief economist with KBC Ireland, said it is unusual but not unprecedented for confidence to drop for four months in a row.
"The previous four occasions this has happened in the twenty-six-year history of the survey reflected circumstances in which consumers faced marked difficulties in assessing potentially momentous changes in economic conditions," the Mr Hughes said.
The last time the survey slipped for four consecutive months was in the summer of 2019 amid concerns over Brexit.
"Prior to that, it was when the scale of potential damage caused by the financial crisis seemed to crystallise in the summer of 2010," Mr Hughes explained.
"Before that, it was when the global financial crisis loomed large in the first half of 2008 and the first time the sentiment index fell for four months running was when the Dotcom bubble burst in 2001.
"Judged from this perspective, it would seem that Irish consumers are still trying to properly assess how large and how lasting the current pressures-largely centred on surging inflation, may prove to be."
The one area of the survey which showed a marked improvement in May compared to April was the buying climate.
Holiday spending plans
The latest consumer sentiment survey also examined consumers plans for holiday spending.
The survey found a sharp decline in the number of consumers who are not planning to take a holiday this year for reasons other than cost.
Meanwhile, amid the rising cost of living, the number of people who said they cannot afford to go on holiday was recorded at 23 per cent in May, up from 19 per this time last year.
Almost one in four consumers feel a holiday is out of reach financially for them. How the small change in this figure compared with 2021 suggests that this is a persistent problem rather than one sparked by the recent surge in inflation.
While the most common response of those planning a holiday was to spend roughly the same as last year, the survey found that many consumers have factored in higher holiday costs in their spending plans.
The number of people planning to spend more than 20 per cent extra on holidays has risen to eight per cent this year compared to five per cent in 2021.
