Consumer Mindset - July 2024
This report is informed by the Credit Union Consumer Sentiment Index,
in partnership with Core Research.
As I write, Trump has claimed God saved him from an attempted assassination, anti-immigrant protesters have set another building on fire, and airlines and banks are knocked offline due to a global IT fault. However, for now, the sun is shining in Ireland, and this seems to be the case for the public mood. Despite the constant delivery of unsettling news events, it appears that people are rebuilding their confidence after two years of a flatlined mood and sentiment. There are two key questions: is this simply the summer effect? And will this sustain as we approach 2025?
CONSUMER CONFIDENCE
After four consecutive months of a downward trend, the Credit Union Consumer Sentiment Index, in partnership with Core Research, rose from 65.7 in May to 70.5 in June. This upward momentum has continued in July, with this month’s Index at 74.9 – the highest since February 2022.
In Core’s Mindset report in July, there is evidence beyond economic confidence that the public mood is turning. In Core’s Emotional Tracker, 45% of people say they are experiencing happiness, and Core’s Direction Score highlights a further rise in people feeling things are going “in the right direction,” primarily in relation to a rise in people having confidence in their own personal finances. 54% of people state their personal finances are getting better, compared to 46% who say they are getting worse.
While the inflation rate fell again to 2.2% in June 2024, 47% of people say “affording everyday items” is getting better, a rise from 41% of people three months ago in April.
Overall, we are now seeing a return to consumer confidence not seen since early 2022, before the cost-of-living crisis hit.
CAN THE MOOD BE SUSTAINED?
Brands relying on strong consumer sentiment, as well as the current Government, will be keen to see public confidence return to the market.
While housing has been a key topic of societal discussion in recent years, it is a minority of people (31%) who are impacted, saying their housing or living situation is getting worse. This may explain how 59% of adults are uninterested or unaware that house prices rose again by 3.8% in the first half of 2024. More people were aware of Taylor Swift’s concerts in Dublin and the Women’s Athletic team winning silver medals, which 41% of all adults said brought them happiness.
August results in our research will predict a lot for the remainder of the year. In August 2023, happiness levels were at 48% of the population. With a higher level of consumer confidence, could we see this rise above the 50% threshold in 2024 and sustain through the darker days of winter?
AN AUTUMN OF COMEBACKS?
Things fall apart; the centre cannot hold;
The best lack all conviction,
While the worst are full of passionate intensity.
Yeats wrote this to describe a post-war Europe and the beginning of the Irish War of Independence in January 1919. With a new European Parliament defending against a rise in right-wing ideology and a very strong likelihood that Trump will return to power, will an Irish general election be called after an early October budget this year?
If most voters feel things are improving, we could also see a return of power for the current Government parties. While it is a minority, there will be a significant number of people who will question their housing, health, and climate policies and practices.
For brands, the positive news is that confidence is returning after two years of cost-of-living challenges. However, is this confidence built on short-term stability rather than long-term ambitions? The brands that will create long-term value will be those who truly understand the next generation’s hopes and concerns and connect beyond the short-term market.
