Fuel prices weigh on consumers as drivers prepare for excise increases

Brent crude futures also climbed to around $86 last week. This will eventually trickle down to impact consumers at the forecourt pumps.

Consumer sentiment edged lower again in March as drivers expect to see a rise in fuel prices next month as increases in excise are set to take effect, according to a survey.

Brent crude futures also climbed to around $86 last week after Ukrainian drone strikes disrupted Russian oil refineries. This will eventually trickle down to impact consumers at the forecourt pumps.

The Credit Union Consumer Sentiment Index, a leading survey of around 1,000 adults from across the Republic, showed stubbornly high living costs, a volatile geopolitical environment, and a high-interest-rate/url] environment continue to weigh on household finances.

“While it may no longer be the worst of times, it is still far from the best of times,” said economist Austin Hughes.

"Upward pressure on living costs may have eased, but hasn’t reversed and the economic outlook remains extremely uncertain."

However, the overall outlook on job creation was optimistic among respondents despite a recent wave of closures in the hospitality sector. Separate research by the Restaurants Association of Ireland claimed that the closure of 71 premises last month resulted in around 1,500 job losses.

The overall outlook on job was optimistic, according to the Credit Union Consumer Sentiment Index. Picture: Denis Minihane.

Figures from the Central Statistics Office showed the unemployment rate fell further in February to 4.2% last month. A tight labour market results in mounting wage pressures, however, which many businesses have voiced concern about. Wage inflation is also being monitored by the European Central Bank across the eurozone as it prepares a roadmap for rate cuts.

Meanwhile, the consumer index also showed that Irish households were willing to splurge on home improvements.

Just over 60% of respondents said they undertook some form of spending on home improvements in the past two years, with 37% of consumers reporting that they undertook “significant work” compared to others who refreshed their homes with painting and decor.

A quarter of the respondents said they will borrow to finance their home-improvement spend, despite a high-interest-rate environment. Most of this cohort plan to borrow from credit unions.

“This response was also more commonly seen among those consumers citing difficulty making ends meet," the survey stated. "This might suggest that, for significant numbers of consumers, the associated spend relates more to necessary repairs and refurbishment rather than improvements.”