For the first time in five years, Irish discretionary income has improved, according to the latest ‘Consumer Confidence Tracker’, produced by Behaviour & Attitudes.
This is a positive sign as any improvement in rates of discretionary income has real impact on the domestic economy. When asked 'About how much would you say you spend each week on things you buy for yourself including money spent on clothes, eating out, going for a drink, going to the cinema, gambling, sporting activities and so on?', the average response was €47.08, up from €42.91 last year. However this is well below the €83.97 recorded in 2008.
The Tracker found that events like the Cypriot banking crisis, Personal Insolvency legislation and the introduction of the Property Tax have impacted Irish consumer confidence. However the degree of such decline has been ‘relatively muted’, considering the scale of such events.
However the current figure of €47.08 still remains considerably lower than the 50.94% recorded in 2001. 55% of people feel the economy will be worse off next year (compared to the 12% that believe it will be better).
The survey shows expected future personal income levels are reducing. The impact of cuts, austerity budgets and heightened taxes are effecting its improvement. Over a half of adults surveyed (60%) now believe their income after taxes and inflation will be lower at this time next year, with only 6% believing it will be higher.
Commenting on the latest finding of the survey, Luke Reaper, Director, Behaviour & Attitudes said: “Undoubtedly the Irish consumer is ‘battle weary’. However, when we review the key headline rates over time, we begin to see a trend of reconciliation occurring around consumer confidence in the macro Irish economy.
“This leads us to believe that Irish consumers, while still viewing the economy negatively, are beginning to weather the storm of economic events with a heightened degree of reassurance, which was previously absent from the market. The biggest concern is how to translate this stability into spending – people still expect their future income to reduce.”
The survey was carried out as part of ongoing research since 2002. The results are based on a sample of 1,001 adults, aged 16 and over, controlled in terms of age, gender, socio economic background, class and region to reflect the profile of Ireland.
By Gillian Fitzsimons