Ireland: Consumer confidence slumps to an over-one-year low
May 31, 2016
In May, the KBC Bank Ireland/ESRI Consumer Sentiment Index nosedived from April’s 102.7 points to 98.1 points. May’s print represents the lowest reading since March 2015 and the first time the index dropped below the 100-point threshold since July 2015. In the survey report, KBC pointed out that May’s sharp downturn comes on the back of a broad-based deterioration in all five components of the index. According to KBC, the downturn does not reflect a deterioration in Ireland’s macroeconomic fundamental, but a more pessimistic outlook regarding employment and household finances. A deterioration in sentiment concerning the job market and economic headwinds stemming from the consequences of the EU-membership referendum in the UK have weighed on Irish optimism. Furthermore, Irish consumers feel that the economic recovery has not materialized in greater spending power, prompting them to scale back their outlook on household finances.
KBC also stated that, “while the trend in sentiment in recent months clearly points toward greater nervousness of late, it doesn’t signal any dramatic deterioration in the current circumstances of the typical Irish household. The level of the sentiment index remains above its historic average (of 86.3) and the detailed responses in May suggest Irish consumers remain broadly positive if a little less exuberant in their views of Irish economic prospects. However this month’s results show households remain divided and comparatively downbeat in their assessments of their personal financial circumstances.”