Consumer sentiment declined by one point in June but the change could be seen as a correction rather than a fall, analysts said yesterday, writes Colm Keena.
The IIB/ESRI Consumer Sentiment Index fell from 91.1 to 90.1, the first monthly decline since July 2003.
Although they viewed the change as a correction, the analysts said the figures "argue for a measure of caution in regard to any expectations of a return to boom conditions in this economy any time in the near future".
Mr Austin Hughes, of IIB Bank, said the fall was probably an overdue correction after a record 10 consecutive months of improving consumer sentiment.
"The poorer sentiment in June may also have been influenced by a number of specific factors," he added, instancing the sharp rises in petrol prices and fears of an eventual interest rate rise.
"Uncertainty about the implications of the European and local election results for Government policy may also have encouraged a feel-bad factor," he said.
The index comprises two sub-indices, one measuring consumers' perceptions of their future financial situation and the other measuring their perception of their current situation.
Consumers' perception of their future situation rose from 85.5 to 86.3, while consumers' perception of their current situation dropped from 99.3 to 95.8.
Mr David Duffy of the ESRI said the three-month moving average improved from 89.6 to 90.6. "Thus, consumer sentiment can be viewed as having remained broadly stable," he said.
