Ireland: Consumer sentiment dips in May
June 13, 2017
In May, the KBC Bank Ireland/ESRI Consumer Sentiment Index edged down from 102.0 points in April to 100.5 points. The result in May marks the lowest print thus far this year. Sentiment was dragged down by pervasive economic risks and disappointing economic gains. The monthly reading confirms the notion that consumers remain optimistic but the lack “of clear positive momentum” is preventing any meaningful increases in consumer confidence
May’s reading reflected a more downbeat assessment of the economy. Consumers’ evaluation of the country’s economic outlook was slightly more negative despite a string of positive data from the first quarter. Nevertheless, contradictory policy pronouncements concerning trade by the United States and prospects of a hard Brexit are perhaps the two main culprits behind the less optimistic view. In turn, the current downbeat economic assessment dampened the employment outlook and also made consumers wary of purchasing big-ticket items. On the contrary, consumers’ view of their personal finances for the year ahead was the only component that increased as they consider that any potential economic downturn is highly unlikely.
Commenting on May’s soft reading, KBC noted that, “it is important to emphasize that the current survey reading does not suggest the likelihood of an economic relapse even if it paints a less buoyant picture than many other measures. Some modest improvement in household finances is envisaged in the coming year. More generally, the May Sentiment reading clearly reflects a less threatening environment for Irish households now than a few years ago in the same way that consumer spending power is underpinned by increased numbers at work.”