34% of respondents ranked increases in cost of living as the number one issue facing the Irish economy, closely followed by housing at 28%.
Limerick Chamber has launched the results of its consumer sentiment survey for Summer 2023. The survey results aim to take the economic pulse of the whole Mid-West region with a particular focus on the behaviour of individuals and households.
The findings of the survey report were:
• 83% of respondents expect their financial situation to stay the same or worsen over the coming six months – split between 45% of respondents expect their financial situation to stay the same while 38% expect their situation to worsen. Just 17% of respondents expect their financial situation to improve. This uncertainty feeds into expected large purchases (white goods, electronics, houses, cars etc.) with 67% of respondents thinking now is the wrong time to make large purchases. 43% of respondents expect their savings amount to decrease over the next six months, presumably down to anticipated energy costs during the winter months and uncertainty around their financial situation. Also, 67% of respondents expect to decrease their discretionary (non-essential) expenditure over the coming six months, possibly feeding into the local economy with lack of spending outside key items. However, while consumers are more pragmatic in their approach to spending and their financial situation, 90% of respondents have or will holiday this year with most (44%) holidaying abroad.
• For those respondents that are working, 52% received a pay increase over the last six months. Meaning 48% received no pay increase. The rate of inflation when the survey launched was c. 6.1% – 60% of the respondents that received wage increases failed to keep in line with inflation, meaning their real income has fallen. However, 40% beat inflation by varying amounts.
• 55% of working respondents are either working in a hybrid model or working remotely, this is slightly lower than 57% of workers in Spring 2022. Interestingly, of those people working hybrid or remotely, 83% are working for businesses in the Mid-West, while 11% have offices based in Dublin. This working pattern will likely see long-term changes to demand for office space from some industries.
• The Crescent Shopping Centre stood out as the primary shopping choice within the Mid-West region, as indicated by 30% of survey participants. This location was favoured mainly due to its complimentary and convenient parking options, a diverse range of stores, and its proximity to respondents’ residences. Limerick City Centre secured the second position in terms of shopping preferences, with 24% of respondents favouring it. The rationale behind selecting this destination leaned towards altruistic motives, with respondents expressing their support for locally owned businesses and the broader city area. Additionally, its proximity to home or workplace contributed to its appeal, making it a convenient choice.
• The survey reveals that 87% of respondents anticipate upcoming price hikes, which could affect consumer uncertainty and spending. Concerns about winter energy costs impacting spending arise, with many respondents reducing other expenditures and struggling to save. Some have become more energy conscious. Respondents’ reactions to potential interest rate increases vary, impacting some homeowners and making homeownership more challenging for renters. Despite this uncertainty, 22% plan to take out loans for purchases in the next six months — including 7% of respondents for smaller items through credit cards or personal loans. Confidence in the Irish Economy (44%) outweighs confidence in the Irish Government (33%), with 49% expressing uncertainty in the government, including 30% who lack confidence entirely.
Commenting on the release, Seán Golden, Chief Economist and Director of Policy at Limerick Chamber said
There is uncertainty out there amongst consumers, unfortunately this will impact non-essential spending and thus retail and other business. Many households do not expect their financial situation to improve in the next six months, which again will likely feed into local spending. Despite this, many people still plan to holiday and in particular holiday abroad. Worryingly, less than half of our respondents have received a wage increase over the last six months. Of those that did increase their wages, just 40% beat inflation, meaning their real income fell combining with the cost of living increase
Commenting on the release, Eoghan Carr, Economic and Policy Analyst at Limerick Chamber said
Respondents outline that cost of living, supply of affordable housing, and climate change are the biggest issues facing the Irish economy. When comparing these responses to last year’s survey, a notable change is that climate change has replaced the conflict in Ukraine, perhaps, likely spurred by the increased reporting in adverse weather events over the summer. A vast majority of respondents foresee price increases over the next 6 months. However, 44% of respondents are somewhat confident/very confident in the resilience of the Irish economy
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