Ongoing concerns for the future of the eurozone are strangling the chances of Irish economic growth being driven by consumer spending, according to the latest mood of the nation barometer.
The monthly savings index for July from the ESRI and Nationwide UK (Ireland) showed a month-on-month rise from 91 points to 98 — meaning more people are looking to save money.
However, the underlying themes are that more people are looking to save due to concerns of economic deterioration rather than for any more positive reason, while increasing numbers of people are finding it difficult to put anything aside for savings purposes.
“Those that are able to save are doing so with a precautionary motive, as the ongoing uncertainty continues to have a negative impact on consumer confidence,” the survey noted.
Brendan Synott, managing director of Nationwide UK (Ireland), said: “Worryingly, a decline in the number of people saving has been apparent since the start of 2012. This month, only 32% of people are saving regularly and our data — and other studies — support the contention that this is due to an inability to save.
“While these issues continue to prevail, it is hard to see how a consumer-led recovery will emerge
“Events in the wider economic environment, and continuing pressure on personal circumstances, are making the prospect of a consumer-led recovery less and less likely.
“The continuing instability in the euro currency and a lack of clarity on a potential solution is resulting in people continuing to keep a tight rein on their spending and a continued focus on saving for unexpected events in the future.”
Interestingly, given the recent spate of bank branch closures, the survey said that for nearly 30% of consumers looking to open a savings account, the most important factor was a local presence, with 34% saying the level of protection or guarantee on offer was most important.
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