Consumer sentiment improved in May but remained well below the long-term average as the conflict in the Middle East continued to weigh on confidence, a survey showed today.
The Credit Union Consumer Sentiment Survey climbed to 59.4 in May, a significant jump from a 40-month low of 53.3 in April, but well below the long-term survey average of 83.3.
"It's a pleasant surprise and it suggests that consumers are down, but they're not entirely out," said economist Austin Hughes, who authored the report.
"It's telling you that consumers here are still quite nervous and negative. No surprise there," he said.
The survey's authors pointed to a ceasefire in the Middle East and the announcement of Government energy support measures as likely contributing to the improvement.
"The improvement in May probably reflects the fact that responding to both the slight easing in tensions that we saw at the start of the month on global markets," he said.
"Probably more importantly in the Irish context, I think to the Government measures and the promise of more substantial measures to come in the October budget," he added.
Sentiment improved across all parts of the survey, including people's outlook on their own finances and the wider economy.
The outlook for jobs saw the biggest improvement in the month - which Mr Hughes said was likely a correction to a sharp move in the April survey.
However he said Irish people remain very negative on the direction of the jobs market.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
"That's really the bellwether in terms of the economy because consumers tend to get totally confused by GDP, GNI, modified domestic demand, all these barometers what's happening in the economy, but they can see they understand what the story is on jobs," he said.
"They feel that if things go pear shaped later in the year in terms of household finances, then that will also translate into a weaker jobs market because domestic firms will not be hiring," he added.
This edition of the survey also included a special question, asking consumers how they would deal with a financial emergency, costing them €1,000.
It found that around 40% would use their savings to address something unforeseen like this - but many others would have to take more drastic measures in response.
"13% say they just couldn't manage this... and then you find another 7% who say they would sell something," he said. "6% say they'd turn to a financial lender other than a bank or credit union," the economist said.
"If you add these together, you're probably talking about one in four who we say would be clinging on, you know, roughly half consumers probably comfortable and the balance coping at the moment," he added.
