35% of consumers struggling to cope with inflation – study
The latest monthly Credit Union Consumer Sentiment Survey has found that 35% of consumers said they are struggling to cope with the impact of inflation on their household finances.
Over 55% of respondents said inflation has caused a worsening in their financial circumstances, but they are managing to cope and just 7% said they were not experiencing any notable effect from higher inflation.
The survey of 1,000 adults was conducted between 3 March and 20 March.
Respondents were also asked if they expected the cost-of-living pressures to worsen or ease in the next year.
Some respondents, 15%, said they expect an easing of cost-of-living pressures on their household in the coming 12 months and 36% said they expected the cost-of-living pressure on their households to remain the same.
However, the most common expectation from Irish consumers at 47%, is that the cost-of-living pressures will worsen for their own households.
“Irish consumer sentiment slipped back marginally in March as continuing cost of living pressures, further tech sector woes and ongoing problems in the Irish housing market made consumers somewhat more nervous about their financial circumstances and caused them to scale back their spending plans,” economist Austin Hughes said.
“The small pull back in Irish consumer sentiment should probably be seen as signaling that consumers are still very much aware of the substantial headwinds they face in 2023,” he added.
Speaking on RTÉ’s Morning Ireland, Cork University Business School Agri Economics professor Thea Hennessy said food price rises were a global issue.
She explained that while energy price increases have begun to fall after rises across the board last year, food prices were “much sticker” when it came to price drops.
“There’s a lag in the system. It takes longer for those food price decreases to work through the supply chain, and that was the experience as well last year when prices increased,” she said.
She added: “This is typical of what we see, that food price inflation tends to lag some of the commodity prices and that’s because lots of the producers are in fixed price contracts.
“They have their price agreed for some period ahead. They tend to be slow to pass on price increases across the supply chain, and then it takes a bit longer for them to claw back those losses before they can pass on price decreases as well, and that’s what we’re seeing at the moment.”