This is the first of Bounce Insight’s quarterly Irish consumer confidence report. We examine the mood of Irish consumers and their attitude towards spending.
We asked respondents whether they believed they were better or worse off financially than they were a year ago. Roughly 1 in 4 believed that they were in the same position. However, a surprising 42.68% of respondents said they were better off. This mostly has resulted in the decrease of consumption since COVID-19 on top of government stimulus. Despite that, 30% claim they are worse off.
Economic expectations for the next 12 months are bleak. 42.58% believe the general economy situation will worse somewhat. A further 20% believe it will worsen significantly. Roughly a quarter of respondents believed the economy will improve. Irish consumers also expect the price of goods and services to increase over the next 12 months. Two thirds of respondents expect prices to increase, another 20% believe prices will stay the same and only 15% expect prices to decrease. Overall consumer confidence is low into the foreseeable future.
Housing/accommodation is one of the most pressing issues in Ireland over the last few years and compared to 12 months ago, 44% of respondents feel the same about their housing situation, despite the pandemic. Another 38% feel less confident about their housing situation. Only 17.81% are more confident about their housing situation now, the smallest portion of the responses.
Respondents were asked to rank their biggest concern at the moment. The items included were; tax increases/austerity measures, job security, cost of renting, paying household bills, reduction in personal income. The cost of renting was the biggest concern with 28% of respondents putting it as their first and largest concern. Interestingly, it was also the highest rank for respondents lowest concern with 25% of respondents also ranking fifth place. Job security was also another high concern.
71.4% of respondents don’t believe now is a good time to make a significant purchase. 85.42% of respondents think it is a good time to save. In the coming 12 months, 70% of respondents are likely to save more. We also asked about the portion of their income respondents save each month. 14.30% save approximately 10% of their income each month. A slightly lower amount (12.38%) save 20% of their monthly income. Over half of the respondents (51.7%) set aside 20% or less of their monthly income for saving. Another 8.71% of respondents save 50% of their monthly income and 23.5% of respondents save 50% or more of their income in a month. All of this indicates that Irish consumers will be saving more and spending less.
45.26% of the respondents agree that wage subsidy & unemployment benefits are essential and should be kept in place until April 2021. 26.14% disagree with the above statement, instead agreeing with the statement “Wage subsidy & unemployment benefits are costing the country too much and need to be wound down”. 1 in 4 (28.6%) don’t know what to do with the wage subsidy & unemployment benefit scheme.
Irish consumer confidence is poor and the majority of Irish consumers believe the economy will worsen. Even though over 40% of consumers are better off than they were 12 months ago, the level of savings has increased. While the general confidence towards housing has largely remained the same as it was 12 months ago, the cost of rent is still the largest concern among consumers. Additionally, even though the majority of consumers believe prices will rise in 12 months, they do not believe the current moment is a good time to make significant purchases.