Research has shown that Irish consumers are continuing to feel the pressure of the cost of living crisis, as spending decreased in the month of March.
According to the Credit Union Consumer Sentiment Index, the reading was at 53.9, slipping back from 55.6 in February. This is the first month-on-month drop since last November.
Only 7% of consumers not feeling the effects of higher inflation while 35% say they are struggling. 15% of consumers say cost of living pressures on their households should ease in next 12 months but 47% expect it to worsen.
Research also showed that 2022 was the biggest year of spending for Irish consumers since 2007, with a response to the Covid-19 pandemic showing spending increased by 6.6% in ‘real’ or inflation-adjusted terms in 2022.
However, as research from the Credit Union Consumer Sentiment illustrates, the March reading is also materially stronger than those seen last autumn or at previous survey troughs during the financial crisis or the pandemic. In that sense, it suggests Irish consumers remain conscious of the resilience of the Irish economy.
They also said the downgrade of current household finances likely owes something to a continuing acceleration in grocery price inflation and worrisome trends in mortgage and rental costs.
56% of Irish consumers say that while inflation has caused a worsening in their financial circumstances, they are managing to cope. This group is roughly split into those who report their circumstances as having worsened substantially and those who see a lesser change and say their circumstances have changed.
