Ireland Consumer Confidence At 7-Month High On Easing Price Pressures

Irish consumer confidence improved at the start of the year to the highest level in seven months amid a let up in the cost of living crisis due to a drop in inflation after Christmas, survey data from Credit Union and Core Research showed on Thursday.

The Credit Union consumer sentiment index rose to 55.2 in January from 48.7 in December. This was the highest reading since June, when it was 57.7.

Christmas was challenging for many as they faced a cost-of-living crisis, hospital overcrowding, weather warnings and concerns over the war in Ukraine, the survey said. However, consumers appeared hopeful after the post-Christmas period as inflation continued to drop at the end of the year.

"The switch over Christmas and new year away from the normal routine to less news-focussed time spent with family and friends may have eased consumer concerns somewhat," Credit Union said.

That said, the current level of the index remains well below the 85.6 point average of the now 27 years of Irish consumer sentiment survey data.

"This suggests Irish consumers remain very much aware of the economic and financial challenges that the new year holds," Credit Union said.

Recent data showed that consumer price inflation eased to 8.2 percent in December from 8.9 percent in November. The slowdown was largely attributed to a reduction in utility costs and a decrease in transportation costs. 

All five sub-indexes of the consumer confidence survey improved in January. The strongest month-on-month changes were in those elements of the survey focused on household finances, rather than the broader economic climate.

"As we continue to monitor the public mood, we will look to explore if this positivity is a temporary dip, quashed by the reality of many receiving their winter energy bill or if it signifies a more lasting upward trajectory for the mood of the nation," Emma Kavanagh, research director at Core Research, said.

The survey was carried out from January 4 to 16.