Irish consumer confidence has fallen to an eight-year low as the consumer economy collapsed amid the disruption caused by the current Covid-19 pandemic, the latest Consumer Market Monitor from the Marketing Institute and the UCD Michael Smurfit Graduate Business School indicates. The study shows that disposable income was down by at least 25 per cent.
Consumer spending has also been hit, showing a 36 per cent decline in April. The fall in income came despite employment supports put in place by the Government and ends a run of five per cent growth seen over the past five years. The study showed consumer confidence was down to -24 in April, a level not seen since 2012.
Clothing and footwear sales were down 50 per cent during March and 90 per cent in April as the lockdown to slow the spread of the virus saw shops shuttered and people remain at home. However, sales of electrical goods, home furnishings and food and drink were higher and the pent-up demand could boost sales once retail is allowed to fully reopen.
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Demand for groceries and drink sales were particularly strong in March as stockpiling of food and essentials increased and more people ate at home. The trend is expected to continue for the rest of the year, with growth of about five to 10 per cent expected. Sales of property and cars fell 90 per cent in April with an estimated total decline of 25 per cent for the year.
Sales of new cars were down 29 per cent in March, with imported used cars down 39 per cent year-on-year. The decline deepened to 90 per cent in April as pandemic restrictions saw dealers shut down. The survey predicts sales of new and imported cars in 2020 may near the record low of 104,000 of 2009. A decline of up to 90 per cent during April for the hotel, restaurant and bar sector is unlikely to be recouped over the summer months.
Economic activity is expected to fall by as much as nine per cent this year, assuming an expected gradual recovery in the third quarter picks up pace in the final three months.
