Irish consumer confidence slips in October

The confidence of Irish consumers deteriorated further in October, as Irish households fail to feel the benefit of macro economic gains, pushing an index measuring sentiment fell to a 20-month low.

The KBC Bank Ireland/ESRI consumer sentiment index declined to 97.3 from 102.0 in September, a significant but “not unusually large” fall, pushing the index back to its lowest level since February 2015.

Austin Hughes, chief economist with KBC Bank Ireland, says the decline reflects a further step up in unease that a "much vaunted economic recovery has failed to deliver any marked improvement in the financial circumstances of the average Irish household".

“With the economic outlook becoming more uncertain of late, consumers seem to be re-assessing their own circumstances in a less favourable light,” Mr Hughes said.

All five main components of the Irish sentiment survey posted lower readings in October than in September. The change in consumers’ assessment of both the general economic outlook and job prospects was relatively modest last month but in each instance it was sufficient to bring the October reading to its lowest level since June 2014, Mr Hughes noted.

With consumers increasingly viewing the economic glass as “half empty”, Mr Hughes pointed to risks ranging from ‘Brexit’ through to the Apple tax case and to some high profile domestic industrial disputes.

“The sentiment survey suggests consumers still take a broadly positive view of Irish economic prospects but, since January, the proportion of consumers who expect the Irish economy to strengthen further in the next twelve months has slipped from 61 per cent to 42 per cent while the share that see the economy weakening has risen from 13 per cent to 21 per cent.”

Daniel Foley of the ESRI said that the latest results point to a “continuation of consumer nervousness relating to the outlook for next year”.