Consumer sentiment falls on downbeat expectations for the economy

Consumer sentiment declined marginally last month as more downbeat expectations for the economy mingled with concern over future household finance.

The KBC Bank Ireland/ESRI Consumer Sentiment Index for April edged down to 58.9 from its March reading of 60.

The three-month moving average fell from 61.2 to 59.4, reflecting a slight weakening of sentiment since the start of the year.

The report said while there had been a gradual improvement in sentiment in the past two years the more recent three-month average series has shown a “somewhat poorer trajectory”.

This contrasts with “the progressive build-up in positive momentum” that might be seen in a more normal recovery, it said.

The slightly weaker Irish sentiment was broadly consistent with the modest decline reported in the comparable indicator for the US, the report noted.

In contrast, euro area consumer confidence improved marginally in April.

However, results varied considerably across the member states, with consumers a little more positive in core countries such as Germany, France and Belgium and also a little less worried in Spain and Portugal.

Only Cyprus witnessed as dramatic decline as the survey coincided with its banking bailout.

"The mood of Irish consumers was little changed in April. The marginal decline in the sentiment index is disappointing when compared to a slight improvement across the rest of the Euro area but it is not entirely surprising," Austin Hughes of KBC Bank Ireland said.

“The April survey period saw some downbeat reports on the Irish economy and a number of indicators that point towards a still hesitant recovery.” “At the same time, the mishandling of the bailout of Cyprus served as an unfortunate reminder of the continuing inability of European policymakers to chart a course out of the crisis. In these circumstances, it is scarcely surprising that Irish consumers remained wary,” he said.