Consumer sentiment steady amid US election and economic uncertainty
While notably less anxious than a year ago, the November survey suggests that continuing risks and cost strains mean that Irish consumers remain in a "watch, wait and worry mode," said economist Austin Hughes. (AP Photo/Alex Brandon)
Consumer sentiment remained unchanged in November as worries about trade and tax revenues following the US election result failed to boost confidence in Ireland.
The Credit Union Consumer Sentiment Index recorded a reading of 74.1, identical to what was recorded in October, as conflicting forces weighed on the mood of Irish consumers.
The adverse impact of an increasingly unstable geopolitical backdrop was offset by plans of increased seasonal spending and stable readings on household finances, the survey noted.
While notably less anxious than a year ago, the November survey suggests that continuing risks and cost strains mean Irish consumers remain in a "watch, wait and worry mode," said economist Austin Hughes.
However, he noted that as concerns about the possible impact of policy changes in the US on the Irish economy attracted considerable attention, an unchanged Irish consumer sentiment reading "should probably not be seen in a negative light."
In addition to the unfolding US election result, the upcoming general election in Ireland and increasing uncertainty about the future could have prompted Irish consumers to hit a pause button, leaving sentiment steady but subdued, Mr Hughes continued.
In keeping with the unchanged sentiment reading overall, there were only marginal and offsetting changes in the main elements of survey between October and November.
A small weakening in views on the twelve-month outlook for the Irish economy might be considered a positive outcome in light of the extensive focus on growth concerns and the multinational sector, the survey notes, with this further highlighted by talks of trade and tax rhetoric made by the US president-elect, Donald Trump.
Partly offsetting a weaker general economic outlook was a slightly better jobs outlook following a range of new job announcements and fewer reports of layoffs, coupled with the underlying strength of the jobs market signalled in Labour Force data for the third quarter.
The most positive element of the November sentiment survey was about consumers buying plans, with Mr Hughes saying this reflected seasonal spending demands as Christmas approaches.
"It also likely owes something to a significant ratcheting-up of ‘Black Friday’ advertising promising substantial price discount," he added.
"Cost-conscious consumers are probably also aware of a significant easing in Christmas cost inflation."
In addition, Mr Hughes noted that Government announcements as to exactly when bonus welfare payments would be paid could have triggered related spending plans.
The survey also found that fewer Irish consumers are planning to cut back on their Christmas spend in 2024 than in either of the past two years.
"The clear sense that cost-of-living pressures are easing slightly rather than entirely over is indicated by the fact that the number of consumers planning to cut back compared to last year is still more than four times as many as the number planning to spend more," the survey said.
Commenting on the November Index, David Malone, CEO of the Irish League of Credit Unions said: "'It is encouraging that the November sentiment survey suggests consumer spending plans are improving and while most Irish households will again be careful in their Christmas outlays, cutbacks are not quite as prevalent as in recent years."
