Economy

Irish consumers remain cautious amid uncertain outlook

Latest consumer sentitment survey remains largely unchanged from October’s 20-month low

Shoppers pass along the pedestrianised Mary Street in Dublin. Photographer: Chris Ratcliffe/Bloomberg

Thu Dec 1 2016 - 13:08

Irish consumer sentiment was largely unchanged in November with households remaining cautious about the uncertain economic backdrop and the state of their own finances.

The latest KBC Bank Ireland/ESRI sentiment index rose 97.8 last month from a 20-month low of 97.3 in October.

However, the marginal monthly change is not considered indicative of a change in mood.

!The details of the November survey hint that Budget 2017 may have been seen as offering some support to household spending power but this impact was relatively modest and largely offset by concerns about the broader economic climate,” KBC economist Austin Hughes said.

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“The broader message of the sentiment index is that Irish consumers are having considerable difficulty in assessing the extent to which their circumstances might improve or worsen in the coming year,” he said.

The broadly stable sentiment here was at odds with developments in comparable sentiment measures for the US and the euro area.

In the US, November saw the largest monthly increase in US consumer sentiment since December 2013, reflecting reflected a jump in expectations about the future in the wake of Donald Trump’s Presidential election victory.

In the EU, confidence also improved marginally on foot of stronger economic prospects.

In contrast, UK consumers became notably gloomier in November, with the GFK index posting the second largest monthly drop - after July’s post-referendum slump - since November 2012.

“This seems to reflect a notably more pessimistic view of UK economic prospects over the next 12 months that likely owes something to fears of notably higher inflation and correspondingly diminished purchasing power as well as growing uncertainty about the precise exit path for the UK from the EU,” Mr Hughes said.

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