Consumer sentiment in the Republic held steady this month indicating that consumers are in a 'wait and see' mode as conflicting economic signals argue for caution,, according to the IIB/ESRI consumer sentiment survey, published this morning.
The consumer sentiment index climbed from 97.3 in April to 97.4 in May. In the same month last year the index stood at 91.1 per cent.
The results suggest that while the underlying trend in consumer sentiment "remains broadly positive",
consumers are still struggling to make sense of apparently contradictory economic signals, a stance which may dampen growth in household spending in coming months.
Similar measures of consumer sentiment in the US and in a list of European countries declined in May.
Signs of faltering consumer confidence worldwide of late likely reflect fears that the 'soft-patch' in the global economy of late will have an adverse impact on employment prospects and household spending power.
In this respect, the Irish reading may be influenced by the realization that the growth trajectory of the global economy is not as strong as had been expected at the beginning of the year.
According to the survey there was an improvement in households' assessment of the change in their own financial situation in the past twelve months. This may reflect the easing trend in inflation in early 2005.
The persistence of intense competitive pressures on retailers may have also encouraged a slight improvement in household's assessment of the current buying climate.