Disposable income drops by 25% due to COVID-19 pandemic, Consumer Market Monitor reports
Posted 21 May, 2020
Disposable income across Ireland was down by as much as 25% in April due to COVID-19.
The latest Consumer Market Monitor (CMM) report, published by the UCD Michael Smurfit Graduate Business School and the Marketing Institute of Ireland, found consumer confidence in the economy has fallen to eight-year low.
Despite the Government enacting wage supports and increased social welfare to combat the impact of the coronavirus pandemic, consumer sentiment dipped to its lowest level since 2012.
Sales of property, clothing, and cars were down 90% in April, with spending by the public showing a 36% reduction across the board.
Hotels, restaurants, bars and other services were also down 90% this month, with sectors unlikely to recoup these losses over the summer months.
The CMM report warns that consumer spending is expected to drop by 9% during the remainder of the year.
However despite the downturn, Marketing Professor Mary Lambkin of UCD Michael Smurfit Graduate Business School, said several features of the current crisis differ from the last recession and give cause for some optimism about future recovery.,
A lack of spending opportunities has resulted in increased savings, and a pent-up demand may provide a sales boost once shops and services reopen.
The report also noted that one way in which conditions differ from the previous recession is the level of government support for the unemployed.
It is estimated that employee support payments are protecting up to 75% of disposable income, the CMM said should help to cushion future spending.
By: David Kearns, Digital Journalist / Media Officer, UCD University Relations