Despite giveaway budget, consumers remain cautious about the future

Our latest reading of the RED C Consumer Mood (the % that believe the economy is going to get better less the % that believe it will get worse in the coming six months) is at -22, an increase of 5pts over the past 3mths and an increase of 19pts versus 12mths ago.

While there has been a decline in pessimism over the future of the Irish economy in the past 12mths, we have only seen a moderate improvement in optimism and therefore on balance there remains far more people that believe the Irish economy will get worse in the coming six months than believe it will get better.

Even in light of what was a very generous budget (the fieldwork for this wave was conducted only days after the budget was announced), consumers still have concerns over cost-of-living, which continues to weigh heavily on the overall consumer mood. However, there is an improvement in the outlook for disposable income, which the budget may have had some impact on.

Despite easing inflation and growing expectations of improvements in disposable income, consumers continue to remain conservative as to their plans around spending, although grocery spend remains the one area where increased expenditure is likely to occur.

Even despite the announcement of energy credits in the budget and the implementation of price cuts by retail energy suppliers (mainly in the first half of the year), there is a growing expectation of higher energy bills over the coming six months. Concerns that international energy prices might increase due to ongoing instability in the Middle East could be contributing to this.

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