Irish spending boom unlikely as sentiment dips

Irish consumer sentiment weakened unexpectedly in February in an indication consumers have yet to feel richer depite the growing…

Irish consumer sentiment weakened unexpectedly in February in an indication consumers have yet to feel richer depite the growing economy.

The monthly IIB Bank/ESRI Consumer Sentiment Index declined to 99.5 in February compared to a figure of 106.8 in January.

Mr David Duffy of ESRI said some weakness in the February figure is to be expected after the January sales splurge. However the forward expectations component also fell on increased nervousness about the economy and the labour market.

Mr Austin Hughes, chief economist at IIB Bank, remained sanguine despite the disappointing February data. He insisted that the underlying trend in both consumer sentiment and the broader Irish economy is improving though a spending boom is still some way off.

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"It may be the case that Irish consumers have not seen their personal financial circumstances improve to the extent suggested in bullish economic forecasts", Mr Hughes said.

"A 'show me the money' attitude could mean sentiment might remain vulnerable to occasional setbacks until household spending power picks up sharply. That might not be until SSIA's begin to mature," he added.