Three in four consumers are cutting back on necessities while just 7% of people say they have sufficient funds amid high inflation and don't need to make cutbacks, according to the Credit Union consumer sentiment index for October.
Wealthier and older respondents were slightly more likely to report adequate funds and cuts only to discretionary spending, but reports of cutbacks were widespread and all demographics tended to show broadly similar response patterns.
The Irish Consumer Sentiment Survey is a monthly survey of a nationally representative sample of 1,000 adults undertaken by Core Research. The survey was live 4th – 13th October 2022.
More than a third of respondents have cut spending on groceries in the past 12 months (37%) and expect to do so in the next 12 months (35%), and 41% have cut back on home heating/lighting, implying colder, darker homes this winter, while 43% will do so in the coming year.
Less affluent consumers and those outside Dublin were more likely to report energy-related cutbacks, and those over 65 were also slightly less likely to report cutbacks in this area, perhaps owing to government supports or pre-existing constraints.
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Half have cut back on going out and entertainment, and 47% will do so over the next 12 months, while 11% have cut back on child-related spending, more or less equal to the proportion that will do so going forward (12%).
More than a quarter have cut back on home repairs and maintenance (27%), while a third have cut back on gifts (32%) ahead of Christmas, and holiday spending (38%), and 30% have postponed or cancelled a big ticket purchase such as a car, furniture or television.
Across all those categories, the number of respondents who will cut spending next year is higher than the proportion that already have - 32% for home repairs, 38% for gifts, 40% for holidays, and 38% for big ticket items.
Less than a fifth (18%) have cut back only on luxury or discretionary spend, but just 13% plan to do so next year, while 6% said they have no cut back spending because it was already at a minimum (7% next year).
"These survey responses suggest that many consumers are undertaking major adjustments in their spending," said report author Austin Hughes.
"Despite significant support measures in Budget 2023, consumers see another twelve months of widespread cutbacks ahead of them. In that regard, these results suggest that Budget support measures could have been slightly larger in scale.
"The widespread nature of these cutbacks suggests consumers are experiencing a sea-change in their economic and financial circumstances at present. It also emphasises the extent to which Irish consumer spending may be constrained through the coming year."
(Pic: Getty Images)
