To buy or not to buy? That is the question now for consumers. The economic outlook is grim. Unemployment is rising. House prices are falling. Uncertainty abounds.

Only a fool would squander money in such an environment.

On the flip side of such caution are empty shops, struggling retailers and even fewer jobs. Traders want your money, now more than ever.

So this Christmas, the first of the new recession, there's a strange kind of schizophrenia abroad.

Irish consumers are being asked to consider the impact on the local economy before jetting off to New York or gunning the car to Newry to spend their hard-earned dosh.

The country's businesses need you and your money, they say.

Dublin's Christmas lights are ablaze earlier than usual to get people into the city centre. For the last while, consumer spending has dropped by about a third, according to traders.

They're hoping that's going to change over the next few weeks as the annual Christmas spending frenzy begins.

But the signals aren't good. According to the latest survey, Irish consumers will be spending 10pc less this year.

They'll be thinking a lot more carefully about what they do spend their money on.

Some might argue that this is no bad thing.

The conspicuous consumerism of the last few years could hardly be described as Ireland at its patriotic best. It's also reassuring to know that consumers are acting in their own best interests at the moment.

The last thing anyone should do right now is notch up unnecessary debt.

The coming year will be difficult as unemployment continues to rise and house prices potentially fall further.

Besides, everyone is cutting back. Many employers -- some of whom would like us out spending in their shops -- have cancelled or scaled back the Christmas party this year.

It's a tricky one for official Ireland.

Consumer spending is critical to the economic well-being of a country. Out-going US president George Bush memorably called on American consumers to keep shopping in the aftermath of the September 11 attacks.

They did and the American economy continued to thrive -- at least until the credit crunch arrived.

Irish politicians, while grappling with their own financial problems, would like the Irish consumer to keep things ticking over in the wider economy.

For the last few years, Irish consumers could be safely relied upon to throw money about on the basis that it would always be plentiful.

We marvelled as survey after survey showed Dublin to be one of the most expensive cities in the world.

We might have complained among ourselves but we continued to pay over the odds for our lattes and gourmet sandwiches.

When we raised the odd whine, businesses claimed that costs such as insurance, rent and labour were higher in Dublin.

Higher prices were an unfortunate consequence of the rapidly growing economy, we were told.

Discount supermarkets like Aldi and Lidl nipped at heels of the other grocery stores. Shoppers ventured north occasionally to stock up on booze.

But on the whole, Irish consumers were a sheepish bunch in the face of the Celtic Tiger.

While nobody could welcome a recession, the slowdown this year made for a dramatic change in consumer behaviour.

With less money to spend, the vaguely disgruntled shopper quickly morphed into an outraged bargain hunter.

Southern registration cars colonised the car-parks of Newry shopping centres, their occupants reporting live on the airwaves the discounts they were getting.

Supermarkets considered to be upmarket or pricey were drained of shoppers while the discounters welcomed new and more frequent customers. We carried on shopping but we were increasingly ready to argue over every cent.

Then there were those dramatic few weeks last month when it appeared the financial fabric of the universe was about to unravel.

There's been little by way of good economic news since. Nobody likes to hear about redundancies at any time of year but job losses seem particularly sad in the run-up to Christmas.

Consumers can be forgiven for feeling overly cautious about their money right now. If retailers want to get their hands on shopper's cash, they're going to have to work hard this Christmas.

The good news is they are beginning to do just that.

Many of the big retailers have begun in-store promotions to lure back wary consumers. Supermarkets in particular are slashing prices and offering new value for money products to keep, and for the canny, to grow market share.

There's a full month of shopping yet to Christmas. More promotions are likely.

If there's little else to cheer us up right now, at least we're in demand.

In the bad old days, retailers didn't have to work very hard to get our money.

Some would argue that the upshot of this downturn is that Ireland's retailers have been given a much needed kick up the backside.

The same could be said of Ireland's consumers.

This Christmas it's all about consumers rediscovering consumer power.

Hard cash is a scarce commodity at the moment -- ask any banker or property developer -- so don't hand anything over until you are absolutely convinced you are getting value for money.

However bleak things get, nobody is going to give up shopping.

It's one of the great pleasures in a lot of women's lives. There's a satisfaction, if not a thrill, to snaring a good buy.

And despite all the gloom this Christmas, a bit of hunting around will unearth a few good buys which might help answer that fundamental consumer question -- to buy or not to buy.