Irish consumer mood slips for fourth month in a row

Irish consumer sentiment has slipped for the fourth month in a row in May, making it only the sixth time this has occurred since the beginning of the century, according a new data.

The Credit Union Consumer Sentiment Index declined to 65.7 for May from 67.8 for the previous month.

There have only been five previous occasions in the 28-year history of the data series in which confidence has weakened for four successive months, said economist Austin Hughes, the long-standing provider of analysis and commentary on the monthly survey.

“The most recent was two years ago in the immediate aftermath of Russia’s invasion of Ukraine,” he said. “Before that, it was in 2019, when a disorderly Brexit was threatened. There were also two periods of four month drops in sentiment during the financial crash and one before that in 2002 in the aftermath of the dot-com collapse.”

Mr Hughes said the recent darkening of the public mood signals “disappointment at a lack of improvement” in financial circumstances, rather than a substantial deterioration of Irish economic and financial conditions.

“Notwithstanding reasonably encouraging signs of economic growth and a sharp slowdown in inflation, most Irish consumers appear to need much stronger evidence of a broad-reaching improvement to be convinced that the current trajectory of the economy and their household finances is positive rather than problematic,” he said.

Consumer confidence on both sides of the Atlantic has fallen sharply from where it stood before the Covid-19 pandemic, highlighting how households are continuing to feel the pain from the cost-of-living crisis even if western economies have rebounded strongly from that crisis.

The public mood was 2.2 per cent lower in April from where it stood in the same month in 2019, according to the Organisation for Economic Co-operation and Development (OECD) consumer confidence index.

It was 2.3 per cent lower in the US.

The latest Credit Union survey also found that one in five Irish households say they wouldn’t be able to handle an unexpected €1,000 financial expense or would have to sell something to deal with such an event.